LSE Group rises at open as Microsoft takes 4% stake through 10-year partnership
By Geoffrey Smith
Investing.com -- Shares in London Stock Exchange Group (LON: LSEG ) rose 4.5% at the open on Monday in London, after the group said Microsoft (NASDAQ: MSFT ) will take a stake of 4% in the exchange operator as part of a new strategic partnership.
Microsoft's investment comes in return for a massive commitment to upgrade LSE's cloud-based services, which will see the exchange group spend a minimum of £2.3 billion (£1=$1.2205) over 10 years on cloud services provided by Microsoft's Azure and Synapse businesses.
Between £250M - £300M of that will be spent over the next three years, which will take between 50 and 100 basis points off the group's operating margin before interest, taxes, depreciation and amortization.
The group said the heavy investment in data services will allow revenue to grow "meaningfully" over time, allowing it to offer a range of new products.
"Bringing together our leading data sets, analytics, and global customer base with Microsoft's comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies," said LSE Group Chief Executive David Schwimmer in a statement. "This strategic partnership is a significant milestone on LSEG's journey towards becoming the leading global financial markets infrastructure and data business."
By 03:20 ET (08:20 GMT), LSE stock was up 4.5%.
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