UPDATE 1-Barclays sells benchmark indices unit to Bloomberg

Wed Dec 16, 2015 8:01am EST
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(Adds comments from Bloomberg, details)

LONDON Dec 16 (Reuters) - Barclays Plc has sold its benchmark indices and risk analytics business, which includes the widely used Barclays U.S. Aggregate Bond Index, to financial information provider Bloomberg for about 520 million pounds ($781 million).

Barclays said on Wednesday the sale of its Risk Analytics and Index Solutions business will result in a pretax gain of about 480 million pounds and lift its common equity capital ratio by about 10 basis points when the deal completes, expected by mid-2016.

The bank said it was further evidence of its reduction of activities that it does not consider strategically important.

Barclays and Bloomberg said they would maintain a co-branding arrangement on the benchmark indices for an initial term of five years.

"As financial markets continue to evolve, our clients need and expect the index business to evolve too," said Michael Bloomberg, the company's founder.

Barclays put its index business up for sale in 2014 after designating it as 'non-core', but an auction ran into difficulty after would-be buyers realised some bond pricing data would not be part of the package, people familiar with the situation told Reuters last year. That was partly because some of the data were owned by Bloomberg, the sources said.

Barclays obtained some of its index business as part of its Lehman Brothers acquisition in 2008.

It includes fixed income, inflation-linked, and swaps indices, such as its Aggregate, High-Yield, Emerging Markets, Municipal and Universal Index families.

Thomson Reuters competes with Bloomberg as a financial news and information provider. ($1 = 0.6657 pounds) (Reporting by Steve Slater; Editing by Keith Weir)