Beautiful Virgin Islands

Tuesday, Jun 03, 2025

Microsoft invests $2 billion in London Stock Exchange cloud deal

Microsoft invests $2 billion in London Stock Exchange cloud deal

Microsoft (MSFT.O) will buy a 4% stake worth $2 billion in the London Stock Exchange Group (LSEG.L), in the latest sign of blurring boundaries between Big Tech and financial firms which have raised some concerns among regulators.
LSEG said on Monday the deal would bring a "meaningful" upside to revenues after 2025 from selling more of its existing products via Microsoft apps to broaden the customer base, along with better pricing of products, but it declined to give any specific estimates.

Deepening ties between the handful of big global cloud companies such as Microsoft, Google (GOOGL.O), Amazon (AMZN.O) and IBM (IBM.N), and financial companies like banks and exchanges, have prompted regulators to scrutinise the links more closely.

Microsoft has a longstanding relationship with LSEG, and the exchange group's Chief Executive David Schwimmer said that about a year ago they began talks on a more strategic relationship.

"It's a long term partnership. In terms of the products we will be building together, I would expect our customers to start to see the benefits of that 18 to 24 months out and we will continue building from there," Schwimmer told Reuters.

In November 2021, Google said it would invest $1 billion in CME Group to move the U.S. derivatives exchange's trading systems to the cloud. In the same month, U.S. exchange Nasdaq and Amazon announced a similar multi-year partnership.

Regulators have expressed concern about the over-reliance of financial firms on too few cloud providers, given the disruption this could cause if a provider serving many clients went down.

The European Union has just approved a law introducing safeguards on cloud providers in financial services, with Britain set to follow suit.

"You should assume we do not like to surprise our regulators," Schwimmer said, when asked if LSEG has ensured that regulators were on board.

'MEANINGFUL"

LSEG said the link with Microsoft, which gives the software group a seat on LSEG's board, is a partnership to reap the benefits of "consumption-based pricing", and not a traditional cloud deal.

"We will continue to maintain our multi-cloud strategy and working with other cloud providers," Schwimmer said.

Incremental costs will total 250 to 300 million pounds over 2023 to 2025, with a 50 to 100 basis points impact on EBITDA margin over that two-year period.

Analysts asked Schwimmer to elaborate on his comment about a "meaningful" upside to revenues from the deal, but he declined to do so.

"This feels like a key milestone in LSEG's journey towards being information solutions-centric, even if 'meaningful' revenue growth specifics are lacking," analysts at Jefferies said.

Jefferies analysts said the deal could "transformationally" broaden the appeal of LSEG's Workspace, with a potentially compelling alternative to Instant Bloomberg available for the first time.

LSEG shares were up about 3% and were the top performers on the blue-chip FTSE 100 index (.FTSE) and on course for their strongest day since mid-August.

Microsoft's Frankfurt listed shares were down about 0.4%.

'INTEROPERABILITY'

As part of the deal, LSEG has made a contractual commitment for minimum cloud-related spend with Microsoft of $2.8 billion over the term of the partnership.

The initial focus will be on delivering "interoperability" between LSEG Workspace and Microsoft Teams, Excel and PowerPoint with other Microsoft applications, and a new version of LSEG’s Workspace, Microsoft said.

LSEG and Microsoft will look at how they could work together to potentially shift trading or clearing activities to the cloud

"It's in a more exploratory phase at this point, but we will update the market as that continues to develop," Schwimmer said.

LSEG bought Refinitiv for $27 billion from a Blackstone and Thomson Reuters' consortium, which turned the exchange into the second largest financial data company after Bloomberg LP.

Microsoft will buy LSEG shares from the Blackstone (BX.N)/Thomson Reuters (TRI.TO), consortium, the exchange operator said. The deal will make Microsoft the seventh biggest shareholder in LSEG, based on Refinitiv data.

Thomson Reuters, which owns Reuters News, has a minority shareholding in LSEG following the Refinitiv deal. LSEG also pays Reuters for news.

Microsoft's purchase is expected to complete in the first quarter of 2023.

($1 = 0.8141 pounds)
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×