Microsoft has signed a 10-year deal with the London Stock Exchange Group (LSEG) that calls for the software giant to buy a 4% stake in the exchange in order to jointly develop new products and services for data and analytics.
Microsoft will buy the stake from a Blackstone and Thomson Reuters consortium, which previously sold the financial data company Refinitiv to LSEG for £22bn (US$26.9 billion) in 2021. As a result of the new agreement, LSEG now has a contractual agreement over the 10-year period to spend a minimum of $2.8 billion on cloud-related products with Microsoft.
While the financial terms of the deal have not been fully disclosed, under the arrangement, LSEG’s Workspace data and analytics application—acquired as part of the Refinitiv deal—will become integrated into Microsoft Teams, to provide users with a wider variety of in-app experiences than are currently available, including more detailed trend analysis and risk-building scenarios.
Microsoft said its initial focus would be on delivering interoperability between Workspace and Microsoft Teams, Excel and PowerPoint, with other Microsoft applications and a new version of LSEG’s Workspace, accessed entirely within the Microsoft 365 suite, to be added in the future.
“This strategic partnership is a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business, and will transform the experience for our customers,” said David Schwimmer, CEO of London Stock Exchange Group, in comments published alongside a Microsoft blog post announcing the news.
“Bringing together our leading data sets, analytics, and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies,” he said.
Since the news was announced, in early trading on Monday, LSEG’s share price rose by 4%.
Microsoft CEO Satya Nadella also welcomed the announcement, saying in a press release that “advances in the cloud and AI will fundamentally transform how financial institutions research, interact, and transact across asset classes, and adapt to changing market conditions.
“Our partnership will bring together the industry leadership of the London Stock Exchange Group with the trust and breadth of the Microsoft Cloud — spanning Azure, AI, and Teams — to build next-generation services that will empower our customers to generate business insights, automate complex and time-consuming processes, and ultimately, do more with less,” he said.
The deal with the London Stock Exchange was not the only acquisition news announced by Microsoft in recent days. Last week, the company also bought Southampton, UK-based fiber-optic company Lumenisity for an undisclosed amount.
Lumenisity was spun out from the University of Southampton in 2017, as part of a hollow core fiber-optic research project. Hollow core fiber allows light to travel at a lower latency and speeds up to 47% quicker compared to traditional fiber, with Microsoft saying it plans to use the company’s technology for cloud platform users that require strict latency and security requirements.
“The technology can provide benefits across a broad range of industries including healthcare, financial services, manufacturing, retail and government,” said Girish Bablani, corporate vice president for Azure Core, in a blog post.