UNITED KINGDOM: Canada's Thomson Corp. agrre to buy Reuters Group for 8.7 billion pounds to create world's biggest news and financial data company

Canadian publisher Thomson Corp. has agreed to buy Reuters for about 7 billion pounds ($17.2 billion) to create the world's biggest financial news and data group, the companies said on Tuesday (May 15). The takeover has the support of the Reuters Founders Share Company, which has the power to block a change of ownership, but the deal still needs regulatory clearance and shareholder approval, the companies said in a joint statement. Thomson said it would do what was required to win anti-trust clearance. Reuters Chief Executive Tom Glocer, who will head the combined Thomson-Reuters group, declined to predict how long the process would take but said disposals may not be needed. The companies say the combination is a natural fit across geography and products, bringing together Reuters strength in real-time data and news with Thomson's historical information. "The proposed merger between Thomson and Reuters is opportunity on a grand scale." said David Thomson, Chairman of Thomson Corp., at a news conference held at Reuters' headquarters in London's Canary Wharf. Reuters Chairman Niall Fitzgerald said that combining the two companies would create "truly an information powerhouse". For Thomson, the combination of the two companies adds muscle to its financial services business. For Reuters, it reduces exposure to cyclical financial services. "By bringing these two great companies together -- Thomson and Reuters -- what we now have is the capability to meet the demands in this changing industry because we'll have the scale, the depth of content and the breadth of operation geographically and by product lines to do so," Glocer said. The Thomson family, which owns 70 percent of Thomson Corp. via its Woodbridge holding company, backs the takeover and some Reuters investors have said the offer of 352-1/2 pence and 0.16 Thomson shares for each Reuters share is fair. At Monday's (May 14) closing prices, the offer is worth 692 pence per share. Reuters shares gained 2.8 percent to 622-1/2 pence by 0802 GMT, a discount of 10 percent. Glocer said Thomson-Reuters would have revenues of more than $11 billion, 60 percent from its financial information and news business, to be called Reuters, and 40 percent from its law, tax and science markets, to be called Thomson-Reuters Professional. With 34 percent of the financial information market, it will overtake Bloomberg LP, which has 33 percent, according to industry newsletter Inside Market Data. Thomson has been building its financial data business as it looks to tap into booming global markets. It sold its education unit for 7.75 billion U.S. dollars in cash last week. Woodbridge will own 53 percent of Thomson-Reuters and support the Reuters Trust Principles of integrity, independence and freedom from bias. Unions representing Reuters staff in Britain, Canada and the United States wrote to the Reuters Founders Share Company on Monday expressing "deep concern" about the impact a single controlling shareholder could have on Reuters news values. Woodbridge will be granted an exemption to the 15 percent shareholding limit set by the Reuters Trust Principles as long as it remains controlled by the Thomson family. Reuters Chief Operating Officer Devin Wenig will become CEO of the new Reuters while Thomson COO Jim Smith will be CEO of Thomson-Reuters Professional. Thomson Chief Financial Officer Bob Daleo will be CFO of Thomson-Reuters. The companies expect to make more than 500 million U.S. dollars of annual savings within three years of completion of the deal. (Reporters and editors involved in the writing and editing of this report may own Reuters securities and are bound by the Reuters Code of Conduct, which restricts dealing in securities in companies a journalist is reporting on.) MV/AD

ITN Source | May 15, 2007

Tags:. .representing. .britain. .via. .proposed. .historical