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Microsoft Acquires Four Percent Stake in London Stock Exchange

Microsoft has struck a ten-year transformational deal with the London Stock Exchange (LSEG) to deliver cloud, data analytics, and workspace products across the exchange operator’s entire technology architecture.

Under the arrangements, LSEG’s data platform and other key technology infrastructure will migrate into Microsoft’s Azure cloud environment.

The exchange operator has agreed to a maximum $2.8 billion spend commitment for cloud services and support in a deal that is expected to generate a total of $5 billion in revenue for Microsoft.

To further cement the partnership, Microsoft is acquiring a four percent stake in the London exchange through the acquisition of shares from the Blackstone/Thomson Reuters Consortium.

David Schwimmer, CEO of London Stock Exchange Group, states: “We are delighted to welcome Microsoft as a shareholder. We believe our partnership with Microsoft will transform the way our customers discover, analyze and trade securities around the world, and create substantial value over time. We look forward to delivering on that potential.”

The package of solutions will see LSEG use Azure Purview and Azure Synapse to consolidate its datasets, including the Refinitiv platform, on Microsoft Cloud. The parties have also agreed on the development of a new version of LSEG’s data and analytics product Workspace with seamless Teams (chat, calls, meetings) and Microsoft 365 (incl. excel native analytics and charting) interoperability. This could transformationally broaden the appeal of that product, with a potentially compelling alternative to Instant Bloomberg available for the first time.

LSEG and Microsoft have agreed to co-invest in the product development roadmap for the data platform and analytics initiatives. LSEG’s total incremental cash costs relating to the programmes from 2023 to 2025 are expected to be in the range of £250-300 million.

Says Schwimmer: “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.