Microsoft on Monday said it was investing in the London Stock Exchange in a deal that will see the stock exchange use the software giant’s data and cloud infrastructure. Microsoft
is going to buy a 4% stake in the London Stock Exchange
— valued at £1.5 billion ($1.8 billion) using Friday’s closing price — from Blackstone
and Thomson Reuters
which hold a stake in LSE from the Refinitiv deal. In addition, Scott Guthrie, who is an executive vice president of cloud and artificial intelligence, will join the LSE as a board member.
LSE shares jumped 4% in early trade. Amazon’s
AWS has previously identified the LSE as a customer. Over the next three years, the LSE will be spending an additional between £250 million and £300 million, which will hit EBITDA margins by between 50 and 100 basis points. The LSE will commit to spending at least $2.8 billion with Microsoft on cloud consumption over 10 years. The LSE said the deal over time will result in more revenue growth, and that Microsoft will co-invest in the product development roadmap for data and analytics. Microsoft will be prevented from selling LSE shares for at least a year after deal completion, and won’t be able to sell more than half during the second year.