S&P Global & IHS Markit Completes $140 Billion Merger to Form Leading Financial Information Services Giant
11th March 2022 | Hong Kong
S&P Global and IHS Markit have announced the completion of their $140 billion merger into a leading financial information services giant on the 28th February 2022. With the transaction completed, S&P Global will offer an enhanced value proposition for our global customer base across data & analytics, ratings, benchmarks, indices, commodities & energy, transportation, and engineering. S&P Global also completed the sale of IHS Markit OPIS, Coal, Metals and Mining, and PetrochemWire business to News Corporation. Douglas L. Peterson, President and CEO of S&P Global: “Today’s announcement marks the successful unification of two great companies that will be stronger together as a combined company. Our merger unites a unique collection of innovative assets and technology capabilities from two world-class organizations to benefit our people, our customers and our shareholders. Our combined strengths in credit and risk management, indices across multiple asset classes, private markets, ESG and energy transition data and analytics will accelerate the growth of our business and broaden the scope of services we can provide to the markets. I am excited by the exceptional prospects for the future of our Company and honored to lead our expanded organization.” S&P Global will comprise six operating divisions:
- S&P Global Market Intelligence led by Adam Kansler
- S&P Global Ratings led by Martina Cheung
- S&P Global Commodity Insights led by Saugata Saha
- S&P Global Mobility led by Edouard Tavernier
- S&P Dow Jones Indices led by Dan Draper
- S&P Global Engineering Solutions led by Ewout Steenbergen (Group CFO)
“ S&P Global & IHS Markit Completes $140 Billion Merger to Form Leading Financial Information Services Giant “
S&P Global
S&P Global will comprise six operating divisions upon close:
- S&P Global Market Intelligence led by Adam Kansler
- S&P Global Ratings led by Martina Cheung
- S&P Global Commodity Insights led by Saugata Saha
- S&P Global Mobility led by Edouard Tavernier
- S&P Dow Jones Indices led by Dan Draper
- S&P Global Engineering Solutions led by Ewout Steenbergen (in addition to ongoing role as CFO)
The combined company will have a strengthened financial profile, with its divisions poised to deliver:
- 2022 guidance: The Company is initiating 2022 guidance with GAAP projected revenue growth of over 40%, margin expansion of approximately 260 basis points, and a diluted EPS range of $13.40 to $13.60. Adjusted projected revenue growth in the mid-single-digits, margin expansion of approximately 130 basis points, and an adjusted diluted EPS range of $13.30 to $13.50, an increase of ~14% at the mid-point over the pro-forma figure for 2021 (see the Company’s Current Report on Form 8K filed on February 28, 2022 which contains exhibits for pro forma combined operating results and related reconciliations).
- Enhanced growth: With S&P Global’s differentiated capabilities in its core segments, as well as high-growth adjacencies, the Company expects to realize 6.5-8.0% annual organic revenue CAGR on average through 2023, balanced across major industry segments.
- Increased profitability: The Company will target 200 basis points of annual EBITA margin expansion on average through 2023.
- Attractive synergies and earnings accretion post-close: S&P Global expects the merger to be accretive to earnings by the end of 2023. The Company expects to deliver annual cost synergies of approximately $600 million, with ~80% of those expected in 2023, and approximately $350 million in annual revenue synergies for an expected total run-rate EBITA impact of ~$810 million in 2026.
- Strong balance sheet to pursue further growth: S&P Global expects to maintain a strong balance sheet and credit profile. The Company intends to maintain a prudent and flexible capital structure and will target a leverage ratio of 2.0-2.5x adjusted gross debt to adjusted EBITA.
- Improved free cash flow generation to support attractive capital return: S&P Global expects to generate annual free cash flow exceeding $5 billion in 2023 with a targeted dividend payout ratio of 20-30% of adjusted diluted EPS and a targeted total capital return of at least 85% of free cash flow between dividends and share repurchases.
About S&P Global
S&P Global (NYSE: SPGI) provides essential intelligence. We enable governments, businesses and individuals with the right data, expertise and connected technology so that they can make decisions with conviction. From helping our customers assess new investments to guiding them through ESG and energy transition across supply chains, we unlock new opportunities, solve challenges and accelerate progress for the world.
We are widely sought after by many of the world’s leading organizations to provide credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help the world’s leading organizations plan for tomorrow, today. For more information, visit www.spglobal.com.
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