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S&P Global, IHS Markit Sell Units to Meet Regulatory Rules for Merger

S&P Global and IHS Markit plan to sell certain businesses to help gain regulators' approval of their plan to merge.
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S&P Global and IHS Markit plan to sell certain businesses to help gain regulators' approval of their plan to merge.

FactSet  (FDS) - Get FactSet Research Systems Inc. Report, the financial information and analytics provider, agreed to acquire Cusip Global Services from S&P Global  (SPGI) - Get S&P Global, Inc. Report for $1.93 billion cash.

Cusip -- the Committee on Uniform Security Identification Procedures -- is a database of data elements that uniquely identify more than 50 million financial instruments worldwide.

Cusip Global Services also is the official numbering agency for International Securities Identification Number identifiers in the U.S. ISIN numbers are universally recognizable identifiers for securities.

FactSet, Norwalk, Conn., also said it expected to receive a tax benefit of about $200 million as part of the deal.

Cusip was founded in 1968 by the American Bankers Association. FactSet said that Cusip's partnership with the ABA would continue.

Cusip Global Services posts annual revenue of about $175 million "with consistent revenue-growth rates in the mid-to-high single-digit range," FactSet said in a statement. The transaction should add to FactSet's adjusted earnings in its first year of ownership.

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S&P Global is the provider of market intelligence, including research, credit ratings, benchmarks and other solutions.

How is FactSet Paying?

FactSet said it would fund the acquisition of CGS with cash on hand and committed financing.

At the same time, IHS Markit said it would sell its Base Chemicals business to the News Corp.  (NWSA) - Get News Corporation Class A Report  (NWS) - Get News Corporation Class B Report media group for $295 million. Base Chemicals provides research and analysis on the chemicals markets.

In August IHS Market also said it would sell Oil Price Information Services, Coal, Metals and Mining, and PetroChem Wire to News Corp.

Why Is the Sale Happening?

The Wall Street Journal reported that S&P Global's divestiture of Cusip and IHS Markit's divestitures of the publications were designed to help gain regulatory clearance for the planned merger of S&P Global with IHS Markit.

Both the FactSet-CGS and S&P Global-IHS Markit deals are expected to close in the first quarter.

FactSet shares at last check were trading 0.8% higher at $483.18. The stock on Monday touched a 52-week high above $488.

S&P Global shares were up 0.4% at $475.76. On Dec. 16 the stock touched a 52-week high above $484.