Redmond-based technology giant Microsoft announced on Monday that it has entered into a 10-year strategic partnership with the London Stock Exchange Group (LSEG).
Microsoft also purchased a 4 per cent equity stake in LSEG by acquiring shares from the Blackstone/Thomson Reuters Consortium.
Thomson Reuters says it plans to use the transaction’s gross proceeds (approximately $1B) to pursue organic and inorganic opportunities in key growth segments and provide returns to shareholders.
The strategic partnership will architect LSEG’s data infrastructure and build next-generation productivity, data and analytics, and modelling solutions with Microsoft Azure, AI, and Microsoft Teams.
David Schwimmer, CEO of LSEG, says, “This strategic partnership is a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business and will transform the experience for our customers.
Microsoft-LSEG Partnership highlights
As part of the partnership, LSEG’s data platform and other critical technology infrastructure will migrate into Microsoft’s Azure cloud environment under the arrangements.
LSEG has a contractual agreement to spend a minimum of $2.8B on cloud-related products with Microsoft over the partnership term.
The US tech company also plans to appoint Scott Guthrie, Microsoft’s Executive Vice President, Cloud and AI Group, as a non-executive director of LSEG in due course.
The announcement follows as LSEG faces pressure to make its $27B acquisition of data and trading group Refinitiv in 2019 worthwhile, reports Financial Times.
Further, Workspace, LSEG’s data and analytics workflow solution, will use Microsoft applications, including Teams and Microsoft 365, and the companies plan to introduce innovative new cloud-based analytics services.
Both companies intend to use Azure Machine Learning and LSEG’s advanced analytics and modelling capabilities to co-develop a new suite of solutions to give financial institutions a much broader reach.
Satya Nadella, Chairman and CEO of Microsoft, says, “Advances in the cloud and AI will fundamentally transform how financial institutions research, interact, and transact across asset classes and adapt to changing market conditions.”
He adds, “Our partnership will bring together the industry leadership of the London Stock Exchange Group with the trust and breadth of the Microsoft Cloud — spanning Azure, AI, and Teams — to build next-generation services that will empower our customers to generate business insights, automate complex and time-consuming processes, and ultimately, do more with less.”
