Microsoft – London Exchange Deal

Microsoft plans to purchase a 4% ownership in the London Stock Exchange (LSEG) for a deal worth $2 billion that will expand the tech giant’s influence into European financial institutions. 

The stock exchange made the announcement on Monday without outlining the specific details of the deal; however, the partnership will allow LSEG to use cloud-computing infrastructure to help boost profits via Microsoft products such as Azure, AI, and Teams. 

LSEG will invest at least $2.8 billion into Microsoft’s cloud products over the course of a decade. Moreover, the technology company’s executive vice president, Scott Guthrie, who oversees Microsoft’s cloud and AI programming, will be made a non-executive director of LSEG

HSBC Canada by RBC

Royal Bank of Canada has agreed to buy the Canadian arm of mutinational bank HSBC for $13.5 billion in cash.

RBC chief executive Dave McKay said the deal offers the opportunity to add a complementary business and client base

HSBC Canada makes more money than HSBC’s business in the U.S., which is double the size.

HSBC Canada was established in 1981 – an arm of a global bank headquartered in London. While considered small by RBC, it has $134-billion of assets, serves almost 800,000 retail customers and 12,000 businesses, and is a prominent lender to industries such as real estate, manufacturing and wholesale-retail. In 2016, it made a push in residential mortgages, offering lower rates than the bigger banks. That made a splash: its mortgage business, according to RBC, grew by a third in the past four years.

The sale of HSBC’s Canadian business comes in the wake of immense pressure from its biggest shareholder Ping An, to spin-off the Asian business. HSBC, based in London, generates much of its profit in Asia.

Ping An has argued a separation of the Asian business could unlock US$25 billion to US$35 billion in market value and free up billions in additional capital held for regulatory reasons, according to people familiar with its thinking.The bank operates in 63 countries and territories worldwide.

Ping An has argued a separation of the Asian business could unlock US$25 billion to US$35 billion in market value and free up billions in additional capital held for regulatory reasons, according to people familiar with its thinking.