LSEG to spend £1 billion on Refinitiv integration this year

The $27 billion acquisition of data and analytics giant Refinitiv was completed by LSEG in January earlier this year.

The London Stock Exchange Group (LSEG) expects to spend £1 billion in 2021 to cover costs associated with the integration of Refinitiv and Borsa Italiana separation following two major deals across both businesses. 

Speaking on LSEG’s full-year 2020 earnings call, group chief financial officer, Anna Munz, told analysts that roughly £700 million of the projected £1 billion would cover legacy costs and expenditure across LSEG and Refinitiv.

A further £150 million has been allotted by the exchange to cover costs and investments relating to the integration of Refinitiv. Around £50 million of that set aside for the separation of LSEG’s Borsa Italiana business, which it agreed to offload to seal its $27 billion merger with Refinitiv.

“This investment reflects the ongoing spend at LSEG and Refinitiv, plus some costs associated with the achievement of cost and revenue synergies, and additional expense for the separation and divestment of Borsa Italiana,” Manz commented.

LSEG completed its acquisition of Refinitiv on 29 January, taking the total market capitalisation of the entity to £44 billion. At the same time, European exchange operator Euronext is in the process of acquiring Borsa Italiana from the LSEG for €4.3 billion.

“The growth engines that exist within each of LSEG, legacy LSEG and the legacy Refinitiv business continue to be very attractively growing,” David Schwimmer, CEO of LSEG, added on the earnings call.

“We will continue investing. I think there are opportunities and we have some clear targets in terms of what we are going to do to improve some of the workflow.”

The exchange received approval for its $27 billion acquisition of Refinitiv from the European Commission in January earlier this year. 

The approval followed LSEG’s confirmation that it would be selling off its Borsa Italiana business to alleviate concerns from the EU watchdog that its Refinitiv deal would dampen competition.