Microsoft Corporation (NASDAQ: MSFT) confirmed the acquisition of a 4% stake in the London Stock Exchange. As per London Stock Exchange, this investment is part of a 10-year partnership with Microsoft. According to the LSEG and tech giant, the deal is likely to increase revenue growth significantly over time as new products are introduced.
As per the new deal, the London Stock Exchange Group, which successfully executed a $27 billion deal with Blackstone and a consortium led by Thomson Reuters to purchase the Refinitiv data platform, committed to paying a minimum of $2.8 billion in fees to Microsoft over the course of a ten-year contract to migrate to the cloud. To strike this deal London Stock Exchange has renounced a 4% equity stake worth around $2 billion.
Furthermore, LSEG will transfer its data platform and other important technology infrastructure to Azure, while the Workspace data and analytics product acquired as part of its Refinitiv purchase last year will be incorporated with core Microsoft applications such as Teams and the broader Microsoft 365 software suite.
In addition, the collaboration will enable all LSEG customers to cooperate via Teams, as well as create models and graphs by integrating LSEG content into Excel. However, the extent of the collaboration appears to be fairly broad as the companies are making arrangements to combine Microsoft’s cloud-based machine learning smarts with LSEG’s analytics. The companies are also planning to co-develop a new suite of solutions for financial institutions.
This deal is beneficial for both firms as it brings a massive cloud contract for Microsoft that opens it up to Refinitiv’s 40,000 customers, as well as an equity investment in a major Bloomberg challenger. On the other hand, LSEG now has the technological and financial support of one of the world’s largest public cloud providers.