Hong Kong's stock exchange has tried to gatecrash the LSEG bid for Refinitiv. The head of the London market has responded.

The head of the London Stock Exchange Group, which recently announced a $27 billion acquisition of Refinitiv, the global data firm, has defended the bid in his first public comments since the Hong Kong stock exchange attempted its own takeover for the LSE. 

This publication has already asked industry figures how the LSEG’s acquisition of Refinitiv, if it goes through, will affect the wealth management industry that uses Refinitiv’s technology. 

The LSEG takeover agreement came less than a year after a consortium led by Blackstone, together with Canada Pension Plan Investment Board and GIC, completed a partnership deal with Thomson Reuters for the latter firm’s Financial & Risk business, which was subsequently rebranded as Refinitiv. That consortium owned 55 per cent of the equity in Refinitiv, and Thomson Reuters kept the remaining 45 per cent stake.

David Schwimmer, the CEO of LSEG, was quoted by the Daily Telegraph (20 September 2019) as saying that the Refinitiv deal, announced a month ago, was a “very strong fit strategically”. 

Refinitiv will help LSEG exploit the “increasing importance” of data and analytics, and open up new asset classes such as foreign exchange, he was quoted as saying. 

The executive would not say what he thought about the recent £32 billion ($39.9 billion) bid for LSEG by Hong Kong Exchanges and Clearing. A stumbling block is that the Hong Kong organisation, seen ultimately as being swayed by mainland China and authorities in Beijing, would use its ownership to project Chinese economic and political power further into the West. Such a move could sour Anglo-US relations, in much the same way that the UK’s use of China’s Huawei 5G communications network technology has done.