Antitrust Scrutiny? S&P-IHS Markit Deal to Create Oil and Financial Data Behemoth

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Two Wall Street giants in the oil and financial data field - S&P Global Inc and IHS Markit -- could become one company, making a large financial data behemoth. The Wall Street Journal reported that the deal could be announced as early as on Monday. The reported deal value is $44 billion, the Journal reported, citing people familiar with the matter.

Separately, Reuters also confirmed that S&P Global was nearing a deal to buy IHS, in the second largest M&A deal this year. Both S&P and IHS did not respond to requests for comment.

While S&P gives debt ratings of sovereigns and companies besides serving capital and commodity markets, IHS sells data on automotive and technology industries, and publishes Jane's Defence Weekly.

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People queue beside the bronze bull in the Financial district which has become a Wall Street icon in New York City, July 18, 2013. U.S. stocks continued to rise on Thursday, sending the Dow Jones Industrial Average and the S&P 500 to fresh all-time highs, boosted by upbeat economic data and corporate earnings. IANS

'The Merger Would be a Shock'

IHS Markit came into existence after the 2016 merger in which the Wall Street company acquired London-based Markit for $9.8 billion. Currently, the market value of IHS is pegged at $36.88 billion, according to Reuters data. The market capitalization of S&P is calculated at $82 billion.

"That merger would be a shock, no doubt ... There could be some intense regulatory scrutiny," said Craig A. Huber, founder of Huber Research Partners LLC. He added that competition issues could also crop up as there will be an overlap between the two companies' oil and financial data.

IHS Markit
IHS Markit

A Bloomberg report notes that the news of the acquisition comes at a time when both the companies have made significant growth on the stock market. The S&P 500 closed at a record Friday, trading 29.8 times estimated earnings, while IHS Markit shares traded at 33.5 times estimated earnings.

If the two data giants come together it will be the largest M&A deal after the $56 billion transaction between two of China's biggest oil and gas companies, which was finalized in July, according to Bloomberg.