London Stock Exchange expands US foothold with Russell aquisition
The London Stock Exchange (LSE) is expanding in the US with the £1.6billion acquisition of a financial index and investment management business, lifting its shares, writes Philip Waller.
LSE, which owns the UK’s FTSE 100 Index, is buying Frank Russell from owners Northwestern Mutual in a deal expected to complete late this year or early next year.
It expects Russell’s index business, which provides benchmarks to US-focused equity funds and others, to add a stronger foothold in the US to its index operations in Europe and Asia. It includes the Russell 2000 index of smaller companies’ shares.
The group plans to fund the long-awaited acquisition of the index provider and asset manager, which analysts welcomed, with a £941million rights issue and debt.
The deal also includes Russell’s asset management business, although the LSE plans to review that. Analysts said the LSE may sell, although an LSE spokeswoman declined to comment.
LSE said the enlarged company could save £46million a year and boost annual revenues by £17.6million by year three. It is the biggest acquisition yet by LSE as well as its first rights issue. Shares in LSE rose 114p to 1984p.
