London Stock Exchange shares surge on historic $2.7bn US index company deal

Acquisition of Frank Russell will boost earnings in first full year after deal, LSE says

The London Stock Exchange said today  it would help fund the acquisition of US indexes group Frank Russell  with a $1.6 billion rights issue of new stock. Photograph: Chris Ratcliffe/Bloomberg

The London Stock Exchange said today it would help fund the acquisition of US indexes group Frank Russell with a $1.6 billion rights issue of new stock. Photograph: Chris Ratcliffe/Bloomberg

Thu, Jun 26, 2014, 20:45

The London Stock Exchange has unveiled the largest purchase in its history, snapping up US indexes group Frank Russell for $2.7 billion (€2.98 billion) to send its shares surging.

Europe’s oldest independent bourse said today it would help fund the acquisition with a $1.6 billion rights issue of new stock. It said the move would boost earnings in the first full year after the deal and would catapult it into third position in the booming market for exchange traded funds (ETFs) – low-cost funds that provide an alternative to active fund management – behind global leaders S&P Dow Jones and MSCI.

Analysts welcomed a deal that creates a compiler with around $9.2 trillion of assets benchmarked against the performance of its indexes, which include the UK’s FTSE 100 and other high-profile market measures. – (Reuters)