Microsoft taking 4% stake in London Stock Exchange

Microsoft taking 4% stake in London Stock Exchange

Microsoft is taking a roughly 4% stake in the operator of the London Stock Exchange, which has agreed to spend at least $2.8 billion in cloud-computing services from the technology giant.

That spending commitment will be spread out over 10 years, according to Microsoft's terms of the deal announced Sunday.

Major exchanges have recently partnered with tech companies to shift their technology infrastructure to the cloud. About a year ago, Nasdaq announced it would migrate its North American markets to Amazon Web Services platform. At the same time, commodities and futures exchange operator CME Group inked a 10-year deal with Google to move its trading systems to the cloud.

The London Stock Exchange Group, or LSEG, aims to upgrade its current data infrastructure and analytics capabilities. That will involve migrating LSEG’s data platform and other technology into Azure, Microsoft’s cloud computing platform.

LSEG may spend more than the $2.8 billion on Microsoft’s offerings, contingent on demand for its data platform and other services, the companies said.

Microsoft will be restricted from selling its shares in LSEG for one year from the time it completes buying the 4% stake in the company. Microsoft is also prohibited from selling more than half its LSEG stake in the following 12 months.

The company said that Scott Guthrie, executive vice president of Microsoft’s cloud and artificial intelligence business, will be appointed a non-executive director of LSEG, subject to certain approvals.

Microsoft shares rose 1.8% in midday trading Monday.

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