LONDON (Reuters Breakingviews) - The global race for financial data is hotting up. A year and a half after London Stock Exchange Group charged in to buy Refinitiv, S&P Global has bid $44 billion for IHS Markit in an all-share transaction. Despite being the biggest corporate acquisition of the year, it may not be the last word in the saga. The bid from the ratings and data group looks punchy when one considers that IHS was only worth $13 billion in 2016 when it merged with Markit. But it’s about 21 times the target’s likely EBITDA in 2021, according to Olivetree Financial, around the same as peers like Moody’s and Intercontinental Exchange (ICE). And the value of both buyer and target has almost quadrupled since 2016 as investors have piled into fast-growing and lucrative data businesses, and dealmaking in the sector has cranked up. The attraction for S&P Global is to create even more scale, say by combining its rating operations with IHS’s bond pricing and analytics. It also expects cost synergies worth $480 million a year, likely from splicing together areas of overlap such as commodity pricing and index businesses. Narrowing these down to $390 million a year of nearer-term savings and ignoring claimed revenue hike benefits, they should be worth over $3 billion, taxed and capitalised. That’s comfortably ahead of the $2.3 billion premium. It’s not all good news for S&P, though. IHS Markit’s operating profit next year is only likely to be $1.8 billion, according to analyst estimates compiled by Refinitiv. Even assuming all the synergies come through sharpish, S&P’s return after tax would still be below 5%. Its target’s cost of capital is more like 8%, according to Morningstar. There are two other related problems, both about competition. Mega-deals involving financial infrastructure can take a long time to get clearance from regulators, who are in any case keeping a closer eye on the growing power of data giants. Even if antitrust authorities play ball, the $60 billion ICE won’t take too kindly to the creation of a new $100 billion-plus data gorilla. At a less than 10% premium to IHS’s undisturbed market capitalisation, S&P’s deal may not be a knock-out. If a bidding war follows, the winner will need an awful lot of data growth to avoid value destruction. BREAKINGVIEWS Reuters Breakingviews is the world"s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time. Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.