SIX Group Explores Strategic Options for Financial Information Unit

According to sources familiar with the matter, SIX Group, the Swiss stock market operator, is reportedly considering various strategic options for its financial information unit.

The Group is exploring possibilities such as merging the unit with another company while retaining a majority stake and creating a new legal entity to facilitate potential transactions.

Potential Mergers and Investments:

The discussions are at an early stage, and no definitive decisions have been made. The Group might consider merging the unit with another player or selling a stake to a financial investor, such as a personal equity firm. This move would align with the recent trend in the financial data industry, where high valuation multiples have attracted interest from exchange operators and financial investors.

Recent examples include Blackrock’s £2.55 billion takeover of Preqin and Deutsche Boerse’s $2.2 billion acquisition of Institutional Shareholder Services. Another major transaction was the London Stock Exchange Group’s $27 billion purchase of Refinitiv in 2019.

SIX Group Commitment to Data Business:

Despite the ongoing discussions, SIX has emphasized that the financial information unit remains a core part of its growth strategy. A spokesperson for SIX clarified that the Group is not planning to sell the data business and is instead focusing on organic growth and strategic acquisitions.

In 2023, SIX’s financial information unit generated earnings before interest, tax, depreciation, and amortization (EBITDA) of 55 million Swiss francs ($65.11 million), with total operating income rising from 4% to 406.9 million. The introduction of new products and partnerships caused this growth.

Challenges Facing SIX Group:

The exploration of strategic options comes during a challenging period for SIX. The Group, owned by approximately 120 banks, reported a loss of over 1 billion francs in 2023, largely due to a significant loss on its stake in Worldline, whose stock has plummeted by over 70% in the past year.

SIX Group CEO Jos Dijsselhof has indicated that while the Group studied an acquisition of Allfunds, it ultimately decided against making a bid. Instead, SIX is focused on deals that can expand its data business or provide access to new asset classes.

The outcome of these discussions could reshape the financial data landscape, with potential implications for the broader industry.