S&P Global to Buy IHS in an all-stock deal

-By Ghali Moutawakil, University College London


Acquirer: S&P Global

Target: IHS Markit Ltd

Total Transaction Size: $44 billion

Closed date: Q4 2021

Financial advisor to S&P Global’s: Goldman Sachs, Citi, Credit Suisse and HSBC Securities

Financial advisors to IHS: Morgan Stanley

On November 30th 2020, S&P Global and IHS Markit announced they have entered into a merger agreement which values IHS at $44 billion. Under the terms of the merger agreement, current S&P Global shareholders will own approximately 67.75% of the combined company on a fully diluted basis, while IHS Markit shareholders will own approximately 32.25%. This merger between the two financial data providers would create one of the biggest financial services companies.

“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. We are confident that the strenghts of S&P Global and IHS Markit will enable meaningful growth and create attractive value for all stakeholders.

-Douglas Peterson, President and Chief Executive Officer of S&P Global


S&P Global is a market intelligence giant that provides financial information and data analytics services such as credit ratings and benchmarks. It is the parent company of S&P Global Ratings whose main competitors are Moody’s and Fitch Ratings and of S&P Global Market Intelligence whose competitors are Bloomberg and Refinitiv.

Credits: S&P Global

Headquarters: Manhattan, New York, U.S.

CEO: Douglas L. Peterson

Number of employees: 22500 (2020)

Market Cap: $108.78billion (as of 09/09/2021)

EV: $ 111.46B billion

LTM Revenue: $ 7.83 billion (June 30, 2021)

EBITDA: 4.38 billion

Enterprise Value/Revenue: 14.23

Enterprise Value/EBITDA: 25.43


IHS Markit is a world leading provider of financial market and industry intelligence, formed in 2016 with the merger of IHS Inc. and Markit Ltd. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500.

Credits: IHS Markit

Headquarters : London, United Kingdom

CEO: Lance Uggla

Number of employees: 15500 (2019)

Market Cap: $ 47.77 billion (as of 09/09/2021)

EV: $ 53.19 billion

LTM Revenue: $ 4.48 billion (June 30, 2021)

EBITDA: 1.71 billion

Enterprise Value/Revenue: 11.87

Enterprise Value/EBITDA: 31.19


Short Term assumptions

The combined company expects to maintain a strong balance sheet with annual revenue of more than $11.6 billion and projects to realise 6.5-8.0% annual revenue growth in 2022 and 2023. In addition, it expects to generate annual free cash flow exceeding $5 billion by 2023, with a targeted dividend payout ratio of 20-30% of adjusted diluted EPS.

Long term assumptions

Holistically, there are several positive trends that might lead to growth over the next years. For instance, in the last five years, revenue for the index investing segment increased from $597 million in 2015 to $989 million in 2020. Besides, the global financial data market grew by 6% in 2019 to weight $32 billion. Thus, the market for financial information is expanding quickly, driven by algorithm-driven strategies and, in consequence, S&P Global’s acquisition of IHS seems to be a good opportunity. Particularly, synergies between the two companies are considerable. Indeed, IHS data covering energy sectors would be useful to S&P Global Platts which main area of business is providing energy news and benchmark prices for commodity markets.


Risks and uncertainties have to do with macroeconomic factors. It is common for financial service companies to profit during the expansion stage of business cycle but suffer during a recession, which took place with the pandemic, and have trouble to grow in the recovery stages following a recession.

Concerning regulatory procedures, it is highly probable that the acquisition would be cleared by antitrust regulators given the small amount of overlap.

“There is almost zero overlap. When we look across the whole $11.5 billion of revenue, I would say it is negligible”

-Lance Uggla, CEO of IHS Markit






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