Oct 22 (Reuters) - The London Stock Exchange Group on Thursday agreed to buy financial data firm Octus for about $3.54 billion, its biggest acquisition since the 2019 deal for Refinitiv as the group seeks to cement its stronghold in data and analytics.
LSEG, which operates the London Stock Exchange and the Tradeweb marketplace, has been under pressure from activist investor Elliott, which is pushing for portfolio changes, Reuters previously reported, as AI affects how investors and businesses trade
and use data.
Elliott, which disclosed a stake in the group in February, did not immediately respond to a request for comment on the Octus deal. LSEG has previously said that there had been "good, constructive dialogue with Elliott".
DEALMAKING
"Combining Octus' leading proprietary data and intelligence with LSEG's data and analytics business creates a powerful offering for our customers, and further accelerates our growth," LSEG CEO David Schwimmer said in a statement after agreeing the deal with private equity firm Permira.
LSEG shares were up about 2% in early trading following the announcement.
Octus employs journalists, analysts and legal experts to provide information on credit markets, with a focus on companies in financial distress, for banks and investors.
LSEG said Octus' product set and customer coverage "are highly complementary" to its existing fixed-income products, allowing it to expand its services in that market.
The company has been heavily investing in its analytics business and partnering with AI firms, including OpenAI and Anthropic, to roll out AI tools and license its proprietary data.
In 2019, it agreed to buy Refinitiv for $27 billion from Reuters parent Thomson Reuters, to help it become a major distributor as well as a creator of market data.
UNDER PRESSURE
Shares in LSEG are roughly flat this year and about 26% below their February 2025 peak as fears that AI could disrupt its financial data business and squeeze margins hit the stock.
However, the company on Thursday raised its outlook for 2026 revenue, and forecast organic total income excluding recoveries to grow at least 8% at constant currencies after beating analysts' expectations for the third quarter.
Shares had fallen earlier this month after LSEG confirmed talks over Octus, but Citi analysts on Thursday said the deal had a strong rationale and supportive financials.
The Octus deal will be financed by external debt, LSEG said. It also said the acquisition was expected to be neutral to adjusted earnings in the first full year after completion and to add to earnings thereafter.
LSEG is the largest customer of Reuters, which provides news for its Workspace news and data platform and other products.
(Reporting by Pushkala Aripaka in Bengaluru, Samuel Indyk and Muvija M in London; Editing by Mrigank Dhaniwala, Janane Venkatraman and Tomasz Janowski)
