Antitrust Law Daily Justice Department closes investigation into LSEG’s bid to takeover Refinitiv
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Monday, August 3, 2020

Justice Department closes investigation into LSEG’s bid to takeover Refinitiv

By Linda O’Brien, J.D., LL.M.

The acquisition of financial market data provider Refinitiv will not harm competition, the Justice Department concluded.

The Department of Justice Antitrust Division has closed its investigation into the proposed acquisition of Refinitiv by the London Stock Exchange Group (LSEG) after determining that the merger of LSEG and Refinitiv would be unlikely to result in harm to competition or American consumers. In its announcement, the Department noted that a comprehensive investigation was conducted during which the agency reviewed documents, analyzed data, and interviewed industry participants.

Headquartered in London, LSEG operates the London Stock Exchange, the Italian stock exchange Borsa Italiana, and several other stock and equity products trading platforms. LSEG offers indexes, such as the FTSE 100 and Russell 2000, analytical tools, and data solutions through its FTSE Russell business. Refinitiv, based in New York City, is a global provider of financial markets data and infrastructure. Refinitiv offers consolidated real time and non-real time stock data feeds, as well as desktop solutions for the financial industry. The company also supplies foreign exchange benchmarks and controls several electronic trading venues in various asset classes. In August 2019, LSEG and Refinitiv announced their agreement for LSEG to acquire Refinitiv in a transaction valued at approximately $27 billion.

DOJ analysis. In conducting its investigation, the Justice Department considered the vertical relationships between LSEG and Refinitiv where one firm serves as a supplier to the other of needed inputs and the horizontal aspects of the transaction where LSEG and Refinitiv offer competing products. In analyzing the different aspects to the proposed transaction, the recently released Vertical Merger Guidelines and the Horizontal Merger Guidelines, issued by the Antitrust Division and the Federal Trade Commission, were used.

EC investigation. In June, the European Commission (EC) opened an in-depth investigation to assess whether the proposed acquisition may reduce competition in trading and clearing of financial instruments and in financial data products. The EC’s initial market investigation had identified concerns in the following markets: (1) Electronic trading of European Government Bonds – Horizontal concerns; (2) Trading and clearing of Interest-Rate Derivatives – Vertical concerns; (3) Consolidated real-time data feeds and desktop solutions – Vertical concerns; and (4) Index Licensing – Vertical concerns.

LSEG statement. In an announcement confirming that the Justice Department closed its antitrust investigation of the transaction without remedies, the LSEG noted it has received several other antitrust and foreign approvals and continues to progress in obtaining the remaining conditional clearances and approvals. LSEG expects to close the Refinitiv acquisition by the end of 2020 or early in 2021.

Companies: Refinitiv; London Stock Exchange Group

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