Markit, IHS to merge into $13B data company

U.S. data provider IHS is combining with Europe's Markit to create a $13 billion US company called IHS Markit.

The new company will be based in London, where Markit is currently based. Some operations will remain in Englewood, Colorado, where IHS is located, the companies said.

The shift of headquarters is effectively a tax inversion that ensures the combined business pays the lower U.K. tax rate.

IHS Inc. shareholders will own about 57 per cent of the combined company and Markit Ltd. shareholders will own about 43 per cent.

IHS Chairman and CEO Jerre Stead will serve in the same roles for the combined company, with Markit Chairman and CEO Lance Uggla taking over the posts when Stead retires at the end of 2017.

The combined company is expected to achieve $125 million in cost savings by the end of 2019.

The boards of both companies have approved the deal, targeted to close in the second half of this year. Shareholders must still sign off on the agreement.

Started in a barn near London more than a decade ago by Canadiancredit-trading executiveUggla, formerly with TD,Markit is an important provider of data to Wall Street and the City.

It pulls together information from major bond dealers that is used for research, valuation, trading and reporting about derivatives, bonds, loans and currencies.