The FINANCIAL — Citi has entered into an agreement to sell its Fixed Income Analytics and Index Businesses to London Stock Exchange Group (LSEG) for a total cash consideration of $685 million, subject to customary adjustments.
The transaction includes Citi’s fixed income analytics platform, The Yield Book, and Citi Fixed Income Indices which include the World Government Bond Index (WGBI). Subject to regulatory clearance and other customary closing conditions, the transaction is anticipated to close in the second-half of 2017.
Citi made the decision to divest the businesses following a strategic review process. Citi believes that LSEG is a partner that will optimize the outcome for the Fixed Income Analytics and Index Businesses for key stakeholders, including employees, clients and shareholders. This transaction will give Citi clients a partner who is fully committed to investing in and growing its fixed income analytics and indices businesses.
The Yield Book and Citi’s Fixed Income Indices service a client base of over 350 institutions globally and are used in analyzing a broad array of fixed income instruments, and in particular, mortgage, government, corporate and derivative securities. The businesses’ mortgage models are widely considered to set the industry standard. With respect to the Index Business, Citi’s fixed income indices are designed to appeal to a wide range of market participants and are widely followed and broadly published. The flagship WGBI is among the most closely followed indexes globally, according to Citi.
“This transaction is a positive outcome for The Yield Book and Citi Fixed Income Indices for both clients and employees,” said Okan Pekin, Global Head of Investor Services. “As a result, these businesses will become part of a global financial market infrastructure group with a demonstrated track record of delivering high-quality index and analytics services to its clients. We look forward to a long-term, productive partnership between London Stock Exchange Group and Citi. This divestiture is consistent with Citi’s strategy of focusing on its core businesses.”
“This partnership will help accelerate the growth of our business,” said Richard Burns, Global Head of The Yield Book and Citi Fixed Income Indices. “As part of London Stock Exchange Group, our clients will benefit from continued investment and strengthening of our analytics platform, together with a broader range of indexing capabilities. In line with our unwavering commitment to providing the highest level of client service, we expect to implement a smooth, timely transition by prioritizing clients and the continuity of business throughout.”
Citi’s Institutional Clients Group advised Citi on the transaction. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to Citi.
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