S&P - IHS Deal Likely to Face Antitrust Attention

S&P Global’s (NYSE; SPGI) deal to acquire IHS Markit (NYSE: INFO) for $44 billion is likely to face antitrust scrutiny from the incoming Biden administration, according to reports.

S&P Global, which is providing credit ratings, analytics and indexes, announced it agreed to pay $44 billion in stock to buy analytics giant IHS Markit for $44 billion in the biggest deal in 2020.

The agreed deal creates the third biggest player in the industry after Bloomberg LP and Refinitiv, which held a market share of 32.8% and 21.4%, respectively, in 2019. On the other hand, S&P had a 6% stake while IHS Markit represented 2% of total revenue.

However, a large size of the deal is likely to generate pressure from antitrust authorities in the incoming president-elect Biden administration.

“I think it’s going to run into really tough scrutiny in the Biden DOJ (Justice Department). It would have been better for them if they tried to do this last spring,” Seth Bloom of Bloom Strategic Counsel told Reuters.

“Any enormous merger like this in this particular climate is going to get the attention of the enforcement agency, no matter what administration,” said Anna Pletcher of the law firm O’Melveny.

Some industry experts believe that the DoJ may request to divest IHS’ Opis oil price information service as it directly competes with S&P’s Platts unit.

On the other hand, S&P Global’s CEO Douglas Peterson isn’t too concerned about potential regulatory issues.

“We don’t believe there’s going to be any regulatory issues which we can’t resolve,” he told Reuters.

S&P Global share price closed 3% higher yesterday while IHS gained 7.43% after printing all-time high at $101.45.

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