August 2, 2019 / 8:20 AM / 3 months ago

Moody's flags likely LSE downgrade due to Refinitiv deal

LONDON, Aug 2 (Reuters) - Credit rating agency Moody’s said on Friday it was likely to downgrade the London Stock Exchange Group by a notch due to “extensive” challenges linked to its proposed $27 billion takeover of Refinitiv.

The agency currently has a ‘positive’ outlook for the exchange, which unveiled its proposed takeover of Refinitiv on Thursday.

Moody’s said a successful acquisition and integration of Refinitiv would result in a robust and diverse business that could improve the exchange’s profile.

But the acquisition would be a “transformative and complex transaction” to manage, since it would take several years to integrate the entities, Moody’s said in a statement on Friday.

Refinitiv has over twice the LSE’s revenue, operates in differing business activities with a broader customer base, and has over four times the number of employees and a significantly broader geographic footprint, Moody’s said.

“Based on the information available today... the most likely outcome of its review would be a one-notch downgrade of LSEG’s long-term ratings to Baa1 from A3,” Moody’s said. (Reporting by Huw Jones; Editing by Jan Harvey)

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