Microsoft will buy 4% of the London Stock Exchange as part of a multi-billion pound deal to work together on data analytics and cloud technology, The Guardian reports.

The IT giant will acquire this stake from a consortium made up of Blackstone and Thomson Reuters and will take a seat on the board of the London Stock Exchange Group (LSEG). Such a deal would unite the exchange with one of the most powerful technology companies in the world, namely Microsoft.

“Advances in the cloud and AI will fundamentally transform how financial institutions research, interact, and transact across asset classes, and adapt to changing market conditions”

said Satya Nadella, Microsoft’s chair and chief executive.

Microsoft’s share purchases are likely to be welcomed by investors in LSEG, which is led by the chief executive, David Schwimmer. LSEG’s share price rose by 4% in early trading on Monday, making it the biggest riser on the FTSE 100.

Microsoft and LSEG said they had agreed a 10-year “strategic partnership for next-generation data and analytics and cloud infrastructure solutions”, overseen on LSEG’s board by Scott Guthrie, Microsoft’s executive vice-president for cloud and artificial intelligence.

“We are delighted to welcome Microsoft as a shareholder. We believe our partnership with Microsoft will transform the way our customers discover, analyze and trade securities around the world, and create substantial value over time,”

said David Schwimmer, Chief Executive Officer at LSEG. 

LSEG will transfer its data processing and cloud services to Microsoft, as well as use its software for office work. It will also integrate the technology it offers to financial industry professionals with Microsoft.

This deal will cost LSEG between £250m and £300m in new cash outlays, and the company expects to spend at least £2.8bn on cloud services with Microsoft over the decade.