Microsoft has announced a stake in the London Stock Exchange (LSEG) as part of a 10-year strategic partnership in next-generation cloud and data analytics solutions. Microsoft will acquire a stake of approximately 4% in the operator of the British stock exchange via the purchase of shares from the Blackstone/Thomson Reuters consortium.
“This strategic partnership is an important step in LSEG’s journey to become the global leader in financial market infrastructure and data, and will transform the experience for our clients,” said UK Stock Exchange Chief Executive David Schwimmer.
LSEG’s data platform and other key technology infrastructure will be migrated to Microsoft Azure, which will strengthen its existing cloud migration strategy.
“LSEG’s revenue growth is expected to increase significantly over time as new products come into service,” the UK group said.
Total incremental costs over 2023-25 are expected to be in the region of £250-300m, including around £100m in capital expenditure. They will have an impact of 50 to 100 basis points on the EBITDA margin over the same period.
LSEG has committed to minimal cloud-related spending with Microsoft over the term of the agreement, amounting to $2.8bn (£2.3bn). This amount reflects LSEG’s expected minimum consumption of cloud computing, will be heavily weighted towards the second half of the period as consumption increases.
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