Monday was a good day to be a shareholder in either S&P Global (NYSE:SPGI) or IHS Markit (NASDAQ:INFO), with the former closing 3% higher and the latter 7.4%. The two companies announced jointly that they have agreed to merge. This will be done with an all-stock transaction in which IHS Markit stockholders will receive 0.2838 shares of S&P Global for every share they currently own.
All told, S&P Global and IHS Markit estimate the enterprise value of the deal at $44 billion, which includes $4.8 billion in net debt.
As this is essentially an acquisition, current S&P Global CEO Douglas Peterson will helm the enlarged company. After the stock swap is completed, around 67.75% of the new entity will be owned by S&P Global's present shareholders.
S&P Global and IHS Markit said that their "unique and highly complementary assets will leverage cutting-edge innovation and technology capability... to enhance the customer value proposition and provide the intelligence customers need to make decisions with conviction."
The merger is expected to close in the second half of next year. It is subject to the approval of both companies' shareholders, in addition to that of the relevant regulatory bodies.
IHS Markit is a large-scale business intelligence and analysis provider, while S&P Global's stock in trade is finance sector information such as stock indexes and credit ratings. The potential synergies are many and obvious, hence the rise in both companies' shares on Monday.