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CMA launches ‘in-depth investigation’ into LSEG’s £274m Quantile takeover

Quantile takeover

The UK’s competition watchdog will launch an in-depth investigation into the London Stock Exchange Group’s (LSEG) takeover of Quantile Group.

LSEG was previously handed the deadline of 10 May to provide adequate documentation to prove the acquisition of the fintech would not be harmful to market competition.

A week has passed since the initial deadline, and the Competition and Markets Authority (CMA) has said that after an assessment of the undertakings provided by the firms, it will be progressing the case into an “in-depth investigation”.

Founded in 2015, Quantile is a fintech firm specialising in the optimisation of portfolio, margin and capital management for financial institutions, hedge funds and trading derivatives.

The £274m takeover of Quantile by LSEG took place last December. LSEG said at the time it was to expand its own trading risk management solutions services.

“The acquisition of Quantile builds on the strong growth delivered by LSEG and our Post Trade division,” Daniel Maguire, group head of post trade at LSEG and CEO of LSEG-owned LCH Group said.

“It significantly enhances LSEG’s multi-asset class customer offering across the transaction lifecycle by providing more sophisticated tools and infrastructure for customers to optimise their financial resources and drive greater operational efficiencies in OTC derivatives.”

The CMA launched its phase one investigation into the merger back in March, after it found a risk to competition, due to both firms providing risk assessment and cost reduction services for financial transactions.

David Stewart, the executive director of markets and mergers for the CMA said at the time: “Reducing risk can sound abstract, but it matters – it underpins a range of services, like fixed-rate mortgages, that are vital to consumers. Post-trade services, including compression, are one way of doing this.

“The CMA has decided, on the information currently available to it, that it is or may be the case that the following merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.”