The London Stock Exchange Group (LSEG) is in advanced discussions to acquire New York-based financial data provider Octus in a deal valued at approximately $3.5 billion (£2.6 billion). The potential transaction, if completed, would mark one of LSEG’s largest acquisitions since its $27 billion purchase of Refinitiv in 2021 and signal a significant expansion of the group’s data and analytics capabilities.

Octus, formerly known as Reorg, specialises in credit market data with a focus on companies in financial distress, providing information and analysis to asset managers, investment banks, law firms, and other financial institutions. The firm employs journalists, analysts, and legal experts who monitor regulatory and court filings related to leveraged finance, bankruptcy markets, and private credit. Octus is owned by UK-based private equity firm Permira, which bought a controlling stake in 2022 at a valuation of around $1.3 billion, representing a nearly threefold return should the current deal proceed.

LSEG described Octus’s “coverage and solutions” as “highly complementary” to its existing fixed-income data, analytics, and private markets offerings. The acquisition would immediately contribute to the group’s revenue growth, according to LSEG, which emphasised that no final agreement has yet been reached and the transaction remains uncertain.

The purchase would further LSEG’s transformation into a global financial data powerhouse. In recent years, the group has increasingly shifted its focus toward providing extensive data services, with sales of market information now constituting a major revenue source. The proposed acquisition also represents LSEG’s deeper entry into private markets, a sector that has seen rapid growth; firms managing private equity and private credit have expanded assets under management to an estimated $24 trillion worldwide, creating rising demand for specialised data and analytics.

Market reaction to the news was cautious, with LSEG shares falling 4.7% to £83.50 following the announcement. Analysts noted that the public disclosure of a specific price suggested advanced negotiations, but uncertainty remains regarding deal completion.

LSEG has faced pressure from investors, including activist hedge fund Elliott Management, to boost performance amid concerns over its capital markets business, which contributed only 10% of revenue in the first half of this year. The company is also navigating challenges related to the rise of artificial intelligence technologies, such as AI chatbots from Anthropic and OpenAI, which may disrupt traditional data analysis services by offering automated, lower-cost alternatives.

Permira declined to comment on the discussions, and Octus did not immediately respond to requests for comment. LSEG stressed that while talks are ongoing, a transaction cannot be guaranteed.