London Stock Exchange Buys Citigroup's Analytics Business

Citigroup Inc agreed to sell its fixed-income analytics and index business to the London Stock Exchange Group Plc for US$685 million in cash following a strategic review of the unit.

LSEG has agreed to acquire The Yield Book and Citi Fixed Income Indices, a fixed income analytics platform and index business, from Citi.

In a statement, the FTSE 100-listed group said the acquisition - of a fixed income analytics platform and index business comprising a family of fixed income indices - represents a "significant opportunity for LSEG to enhance the data and analytics capabilities of its Information Services division and its FTSE Russell franchise". With respect to the Index Business, Citi's fixed income indices are created to appeal to a wide range of market participants and are widely followed and broadly published. The World Government Bond Index is among the most closely followed globally.

"I very much look forward to working together with the team at Yield Book and Citi Fixed Income Indices as we develop our businesses over the coming months".

"This partnership will help accelerate the growth of our business", said Richard Burns, Global Head of The Yield Book and Citi Fixed Income Indices. The Yield Book serves about 350 institutions globally, while the fixed-income indices have about 300 clients. The Yield Book products offer analytical insight into an extensive range of financial products in the fixed income space including government, agency, corporate, high yield, emerging market, mortgages, ABS, CMBS, CMOs, and derivative securities.

Companies that compile indexes have been consolidating over the last few years. LSE changed the name of its index business to FTSE Russell after it acquired Frank Russell Co. for $2.7 billion in 2014, while Deutsche Boerse AG bought out the minority investor in Stoxx AG for 650 million Swiss francs ($665 million) in 2015. The indices will continue to be maintained based on existing design criteria and calculation methodologies, and will continue to align with regulatory requirements such as the IOSCO principles. The business generated US$107 million of revenue in 2016, LSE said in a separate statement.

LSE anticipates that the acquisition will add $30 million to revenues over the first three years after completion, alongside providing $18 million in cost savings across the same period, the company said.

LSE expects the EBITDA margin to rise to at least 50 per cent within three years of the deal's completion.

The London Stock Exchange (LON:LSE) has secured a United States analytics business, in a deal worth $535 million.

  • Zachary Reyes