MercoPress. South Atlantic News Agency

Reuters news agency agrees to Thomson takeover bid

Financial information group Reuters accepted an 8.7-billion-pound (12.8-billion-euro) offer from Canadian conglomerate Thomson Corp. on Tuesday to create the biggest global force in the sector.

The new company, to be called Thomson-Reuters, will be listed on the London and Toronto stock exchanges and will be headed by Reuters chief executive Tom Glocer, the two groups said. The takeover would catapult Thomson-Reuters above industry leader Bloomberg into first place and would hand Thomson ownership of Reuters' non-financial news and photo agency. The merger, which both companies believe will save them about 500 million dollars (252.4 million pounds) in cost savings within three years, must still be approved by competition regulators. The tie-up would combine Thomson's strong presence in the United States with Reuters' penetration of markets for trading, financial and business information in Britain and continental Europe. "This combination marks a strategic milestone for both companies," said Thomson president and CEO, Richard J. Harrington, in a joint statement. "For Thomson, it is a defining moment in our journey to become the information provider of choice for the world's business and professional markets. " Thomson has a long history of creating value for all its stakeholders and this transaction builds on that tradition." Glocer said he was looking forward to the opportunity of heading the new firm, which will have annual revenues of about 12 billion pounds and employ nearly 49,000 people worldwide. "The combination of these two great businesses will create an exceptional global information company guided by the Reuter Trust Principles (which ensure editorial independence)," Glocer said in the statement. "It will provide a broader offering to our customers, deliver value to our shareholders and create great opportunities for our people." Reuters shareholders would receive 352.5 pence per share in cash and 0.1600 Thomson shares for each Reuters share they own. That values Reuters shares at 692 pence each, the statement said. Thomson-Reuters will have a 34 percent of the financial information and data market compared with Bloomberg's 33 percent at present. Reuters currently controls 23 percent and Thomson 11 percent. The takeover will result in Thomson owning more than three-quarters of the newly merged business, with Woodbridge, the Thomson family holding company which controls about 70 percent of Thomson, obtaining 53 percent. Other Thomson shareholders will have about 23 percent. Reuters will own the remaining 24 percent of combined group if the deal goes through. Concerns have been raised over competition because of concentration in the so-called "terminal" sector covering the provision of news and financial data on stocks, currencies and bonds to banks, traders and brokerages. At the weekend banks and fund managers were said to be unsettled by the takeover amid worries of growing consolidation among firms providing financial information to traders. Thomson said in the details of the deal that it had "undertaken to take whatever steps are required" to receive anti-trust clearance. The tie-up follows a surprise 5.0-billion-dollar bid last week by News Corp., controlled by media titan Rupert Murdoch, for Reuters' US rival Dow Jones Co., which publishes the Wall Street Journal.