The London Stock Exchange Group said Thursday it agreed to buy Frank Russell Company, the owner of the Russell 2000 Index, for $2.7 billion, a move to expand its business in the U.S. market.
The combination of the London Stock Exchange Group’s FTSE index and Russell’s index will create the second largest U.S.-listed exchange-traded fund, the companies said. And the deal will generate about $30 million in annual revenue benefits in three years, the companies estimate.
The deal also boosts LSEG’s exposure to the money management business in the U.S. Russell, a subsidiary of the Northwestern Mutual Life Insurance Co., operates an investment unit with $256 billion of assets
LSEG will pay for the deal by raising $1.6 billion through a rights issue and the rest with bank debt.
“It sits squarely with our diversification strategy,” said London Stock Exchange Group CEO Xavier Rolet. It “provides another key driver of growth by growing our presence in the U.S.”
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