The merger challenges two of the largest global data providers, Bloomberg and Refinitiv. Douglas Peterson, the president and chief executive of S&P Global, will serve as CEO of the combined group that will be headquartered in New York.
London-based IHS Markit's market cap stood at about $37 billion as of Friday's close, with its stock up 23% this year. S&P Global's stock has gained 25% this year, giving it a market cap of $82 billion. The companies said they expect to generate annual free cash flow above $5 billion by 2023.
Upon completion of the deal, expected to close in the second half of 2021, current S&P Global shareholders will own about 68% of the combined company on a fully diluted basis, while IHS Markit shareholders will own about 32%.
"This merger increases scale while rounding out our combined capabilities, and accelerates and amplifies our ability to deliver customers the essential intelligence needed to make decisions with conviction," Peterson said in a statement.
IHS Markit was up 7% in pre-market trading.
S&P's $44 billion deal to acquire IHS Markit is the largest of the year, according to Dealogic. Other deals within close range include Nvidia's $40 billion deal to buy chip design firm Arm Holdings from SoftBank and NTT Docomo's $40 billion acquisition by Nippon Telegraph and Telephone Corp.
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IHS Markit, which provides financial data used by governments and businesses, was established in 2016 as a union of two smaller firms. It now employs over 5,000 analysts, data scientists, financial experts, and industry specialists.
S&P Global, which includes credit ratings agency Standard & Poor's Global Ratings and commodity benchmark-pricing division Platts, has been seeking to strengthen its data business ever since its $2.2 billion acquisition of SNL Financial in 2015, the FT said.
The two companies could be subject to antitrust scrutiny as regulators become increasingly concerned over the narrowing power of smaller data providers compared with their larger rivals.
Goldman Sachs, Citi, and Credit Suisse served as financial advisors to S&P Global. Barclays, Jefferies, and JPMorgan Securities were IHS Markit's financial advisors.