The London Stock Exchange Group has confirmed that it is in advanced talks to buy Refinitive in a $ 27 billion deal that would make it a global exchange and power plant.
The statement came after talks between the parties were revealed by the Financial Times earlier on Friday.
An agreement for Refinitiv, which was cut out by Thomson Reuters, only last year in a deal with Blackstone, would turn LSE into the main competition for billionaire Michael Bloomberg's economic news and data empire with annual total revenue of more than £ 6mrd.
In the statement after midnight in London, LSE said it would pay for the transaction entirely with the issue of new shares. This will result in the Refinitiv shareholders holding approximately 37 per cent of the total group, although they will have less than 30 per cent of the voting rights.
On Friday, LSE closed with a market value of approximately £ 1
Refinitive, if Eikon terminals are the main rival on Bloomberg's trading floor around financial centers, was valued at $ 20 billion last year. The group was acquired by a private equity consortium led by Blackstone, which acquired a majority of the business from Thomson Reuters, the news and data group.
The consortium repaid $ 13.5bn debt on the company's books in that agreement. By using that figure and $ 27bn corporate value provided by the LSE, LSE is planning to issue about $ 13.5bn in new shares or close to £ 11bn in what will be one of the biggest stock markets in the London market for many years.  If completed, the deal would instantly transform the LSE, best known for trading stock exchanges and clearing derivatives, into a more diversified market data and analytics manager under David Schwimmer, the former Goldman Sachs banker.
Mr. Schwimmer was appointed CEO of LSE in April last year after a more months search to replace Xavier Rolet, the Frenchman who completed his eight-year run in the group after a steering crisis.
"The combined business would create a leading, UK headquarters, global financial market infrastructure provider with significant capital market capabilities, a leading data and analytics business, and a broad-based after-market offering well positioned for future growth in a developing landscape," LSE said.
It added that it aimed to achieve annual cost savings of more than £ 350 million within five years of an agreement. Don Robert, LSE chairman, and David Warren, chief financial officer, will retain their roles.
The talks come at a time when London's role as a global financial center is facing issues, with the United Kingdom preparing to resign from the EU under Boris Johnson, the new prime minister.
Only 18 months ago, the Blackstone-led consortium, which includes Canada Pension Plan Investment Board and the Singapore State Fund GIC, agreed to buy a 55 percent stake in the finance and risk division of Thomson Reuters, where The latter retains the minority interest in the division, Reuters newswire and other entities.
The consortium had agreed to pay Reuters News at least $ 325 million a year for 30 years as part of the deal.
Since then, the investors re-branded Refinitiv and started a cost-effective campaign to make the business more efficient.
Shares in Thomson Reuters, which owns a 45 percent stake in the privately owned Refinitive, jumped 4.3 percent in New York trading on the FT report.
Refinitive had been expected to sell some assets after Blackstone took control of the company. The previous months, it had been in talks with Deutsche Börse about selling its foreign exchange business FXall, an electronic currency trading platform worth around $ 3.5 billion. Deutsche Börse recently said it was still in conversation. In the statement, LSE said Refinitiv reported $ 6.3 billion in net revenues and earnings before interest, taxes, depreciation and amortization of $ 1.6 billion.
The transformation of the business began under Rolet, who resigned as CEO of LSE in the fall of 2017.
The former banker spent more than £ 4bn on obtaining data and clearing businesses, and responded to developments in the markets after the financial crisis.
Among the most profiled offers were the purchase of index compilers Russell Investments and FTSE International, of which 50 per cent already owned it.
It also bought a controlling stake in LCH, the settlement house. Most notably, Rolet attempted a merger with LSE's main European rival, Deutsche Börse, which collapsed in March 2017.
Refinitive would strengthen LSE's existing data and analytics offerings, which include Mergent, a private company information service, and XTF, which focuses on exchange traded funds. The group also owns The Yield Book, an interest indexing service.
Stock exchanges in the US and Europe have built up their data and analytical services over the past few years as stock and bond trading has become more electronic and dependent on faster data sources for which they can claim a premium.