Microsoft Corp. will take a 4% stake in the London Stock Exchange’s corporate parent and provide cloud computer services for the financial markets company, in a deal that reflects the growing use of data and tech in global finance.
The deal announced Monday calls for London Stock Exchange Group PLC, owner of Europe’s biggest stock exchange by market value, to spend $2.8 billion over the next decade on Microsoft products, mainly its Azure cloud service.
The deal brings together one of the U.S.’s biggest tech companies with Europe’s biggest market exchange, combining the former’s cloud computing and conferencing software with the latter’s growing batch of financial data.
“We are building substantial new products together on an entirely different scale” from prior partnerships, LSEG Chief Executive David Schwimmer said on a call with analysts Monday. “We will be investing together. We will be designing products together. We will be going to markets together.”
LSEG shares rose more than 3% Monday morning in London.
The deal reflects the growing symbiosis between big tech and financial markets companies. The LSE has staked its future on selling data, a way to diversify away from the low-margin stock-exchange business.
“We can enable financial-services institutions around the world to mash up these data sources to make better decisions more effectively and more efficiently than ever before,” Judson Althoff, Microsoft’s executive vice president and chief commercial officer, said.
Mr. Althoff compared the potential new products that emerge from the partnership to a Zoom video call that allows participants to pull up research notes, share documents, and type into a group chat all at once. Financial advisers will be able to do that using LSE’s data with one screen, he said.
“This will revolutionize the way financial advisers provide advice to their clients,” Mr. Althoff said.
Microsoft will acquire the LSEG shares currently owned by a consortium of Blackstone and Thomson Reuters. LSEG acquired its Refinitiv financial markets data business for $15 billion in 2021 from Blackstone and Thomson Reuters.