Data providers IHS and Markit have announced that they are merging together and the newly formed entity will be worth $13 billion.

Markit is a market data company based in the UK, while IHS is based in the U.S. and is an information and analytics provider. The new company called IHS Markit will be based in London, which means that it will have to pay 20 percent corporate tax in comparison to the 35 percent corporate tax applicable in the U.S.

Some key operations will still be based in Englewood, Colorado. The Board of Directors of both the companies have approved the merger.

In a joint statement, the companies announced that shareholders of IHS will own about 57 percent, while Markit shareholders will own around 43 percent of the new company.

"This transformational merger brings together two information-rich companies to create a powerful provider of unique business intelligence, data and analytics to a broad and complementary customer base. IHS Markit and its shareholders will benefit from enhanced product innovation to deliver strong returns across economic cycles," says Jerre Stead, IHS Chairman and CEO.

Lance Uggla, the CEO and Chairman of Markit, says that the latest transaction is exciting for shareholder, customers and employees. IHS Markit will have 11 Board of Directors: five will be from Markit, while the rest will be picked from IHS.

Markit was founded in 2003 and it has more than 4,200 people in 13 different countries. The company's IPO raised about $1.3 billion on NASDAQ in 2014. Stead reveals that discussions regarding the two companies merging started soon after Markit went public.

IHS has been on an acquisition spree in the last few years, pursuing a growth strategy by acquiring rival analytical businesses and data providers. In 2015, it completed four deals and in early 2016 the company acquired price-reporting agency Oil Price Information Service.

IHS has been offering services since 1959. The company provides industry data to governments and other sectors such as technology, automotive, chemicals, finance, energy and more. The company went public in 2005 and has around 9,000 employees across 32 countries.

Once the new company is formed, Stead will become the Chairman and CEO, while Uggla will take the role of the President. Uggla will become the CEO and Chairman of the IHS Markit in 2017, when Stead retires.

The deal is estimated to close sometime in the second half of this year. IHS Markit is expected to achieve about $125 million in cost savings by 2019.

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