Microsoft Buys 4% Stake in London Stock Exchange

Microsoft will purchase a 4% stake in the London Stock Exchange (LSEG) as part of a 10-year strategic partnership announced(Opens in a new window) today.

Microsoft is buying the stake, reportedly(Opens in a new window) worth about $1.84 billion, from Blackstone, Thomson Reuters, Canada Pension Plan Investment Board, and Singapore’s sovereign wealth fund GIC. 

The agreement includes a commitment by the 300-year-old LSEG to spend a minimum of $2.8 billion on cloud-related products with Microsoft, while the tech company will provide LSEG with data analytics and cloud infrastructure products using its Azure, AI, and Teams platforms. The two companies will also collaborate on the development of new data and analytics platforms, and will seek to integrate LSEG’s Workspace product with Microsoft Teams, CNBC reports(Opens in a new window). 

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The purchase, which is expected to be complete in the first quarter of 2023, also means Scott Guthrie, executive VP of Microsoft’s Cloud and AI unit, will “in due course” take a seat on LSEG’s board as a non-executive director.

After the announcement on Monday, shares in LSEG rose 4%, the Financial Times reports. 

Speaking to Reuters(Opens in a new window), LSEG’s CEO David Schwimmer said that he expects customers to see the benefits of the partnership “18 to 24 months out” from now.

In LSEG’s statement, he said: “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. 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.”

Meanwhile, Satya Nadella, Chairman and CEO, of Microsoft, said: “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.”

The news comes as tech and stock exchange companies continue to solidify partnerships globally. LSEG bought data and trading group Refinitiv(Opens in a new window) in 2019 for $27 billion, a move that it’s still working through. In November, Google invested $1 billion(Opens in a new window) in Chicago’s CME Group, the world’s largest financial derivatives exchange. 

Last year, Nasdaq and Amazon Web Services agreed(Opens in a new window) on a similar multi-year partnership to build cloud-enabled infrastructure for world capital markets.