The British anti-trust agency, the Competition and Markets Authority (CMA), said on Tuesday that it will clear the proposed Merger of S&P Global and IHS Markit if competition concerns in certain commodity price assessments are addressed.
The decision was made by the watchdog after the completion of a detailed Phase 1 investigation into ‘a range of concerns across the broad range of complex financial markets in which the merging businesses are active’.
According to the CMA, there are only limited competition concerns with the merger as the businesses of the two entities complement each other's services, and their combined presence is relatively small in the areas where both are active.
IHS Markit primarily provides information, Analytics and solutions to business, finance and government clients, whereas S&P Global is a supplier of credit ratings, commodity price assessments, analytics, financial indices and market data.
The two companies agreed to combine their businesses last November as S&P Global made a $44 billion all-stock offer to purchase IHS Markit.
Concerns in Limited Markets
Additionally, the British agency pointed out that the merger would raise competition concerns in a limited number of markets, specifically in the supply of price assessments of biofuels, coal, oil and petrochemicals in the UK.
“After a thorough investigation of S&P and IHS Markit’s business activities, we’ve found that the deal raises competition concerns in only a handful of markets involving the supply of certain commodity price assessments in the UK,” said Colin Raftery, a Senior Director at CMA.
“In these markets, we’re concerned that the reduction in competition could lead to worse outcomes for customers. If our concerns can be addressed, we will clear this merger.”
While the UK competition agency flagged the deal, its European counterpart set to greenlight the merger, according to a recent Reuters report. However, the European Commission is yet to make any official announcement about its decision.
