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LSE in £535m deal with US investment bank Citi

The London Stock Exchange (LSE) has made a £535 million swoop for an American analytics busin ess, marking its first deal since the failed tie-up with Deutsche Borse.

The LSE has struck a deal to buy the yield book, fixed income indices and world government bond index (WGBI) from US investment bank Citi, subject to regulatory approval.

The move will deliver cost savings of around 18 million US dollars (£14 million) and bolster assets under management at FTSE Russell to 15 trillion US dollars (£12 trillion).

Mark Makepeace, group director of information services and chief executive of FTSE Russell, said: "The acquisition of the yield book and Citi fixed income indices supports the continued strong growth and development of London Stock Exchange Group's information services division.

"The acquisition represents a significant step for FTSE Russell to acquire a world-class fixed income analytics and index business, enhancing our ability to provide customers with broader multi-asset capabilities and a deeper data and analytics offering."

It comes after European regulators killed off LSE's £24 billion merger with Deutsche Borse at the end of March, saying the deal would have forged a "de facto monopoly".

The European Commission said the two exchanges had failed to address its competition concerns, while analysts previously cited Brexit as a potential barrier.

The LSE said the takeover of the analytics business will be funded by cash and loans, with the deal expected to be completed by the second half of this year.

Caroline Belcher, joint head of financial services at Cavendish Corporate Finance, said: " The acquisition is reflective of LSEG's commitment to the development of its information services division and follows the group's acquisition of the Russell indices business and Mergent Inc.

"The transaction will further boost LSEG's global presence, with the acquisition of The Yield Book in particular helping to strengthen the group's footprint in the United States, as well as boosting the group's fixed income client base and widening its information services global distribution capabilities."

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