US Wants IHS Markit to Divest Business for Clearing S&P Global Merger

US Wants IHS Markit to Divest Business for Clearing S&P Global Merger

It requires the divestment of three price reporting agencies.

The US Department of Justice has raised antitrust concerns against the proposed merger of two financial markets data giants, S&P Global and IHS Markit. It wants IHS to divest three of its price reporting agency (IRA) businesses to resolve the antitrust concerns.

The US antitrust division announced last Friday that it has filed a civil antitrust lawsuit against the $44 billion merger of the two companies unless the raised concerns are resolved.

To maintain fair competition in the market, IHS needs to divest Oil Price Information Services (OPIS), Coals, Metals, and Mining (CMM), and PetrochemWire (PCW) to Dow Jones, thus also protecting customer access to essential pricing information.

Additionally, the Justice Department wants OPIS to end a 20-year long non-compete agreement with GasBuddy that is preventing the latter from launching data services in the OPIS sector.

“Without these significant divestitures, the proposed merger would have led to higher prices and lower quality for PRA customers throughout the United States,” said US Justice Departments Acting Assistant Attorney General, Richard A. Powers.

“The divestitures will preserve competition for PRA services, which are vital to the proper functioning of commodity markets and promote transparency in the financial markets. The remedy also demonstrates the departments commitment to curtail the anticompetitive use of non-compete agreements.”

A Major Deal in the Financial Data Industry

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. However, regulators in multiple jurisdictions are still evaluating antitrust concerns around the deal.

Earlier in October, the British antitrust agency said that it would clear the merger if competition concerns in certain commodity price assessments are addressed. The European Commission (EC), on the other hand, has already granted a conditional Phase 1 approval for the deal.