Reuters agrees Thomson takeover

British news and data provider accepts $17.2bn bid from Canadian corporation.

    Reuters merger with Thomson will create the world's largest financial data and news provider [AFP] 

    Both companies expect to make over $500 million of annual savings within three years of the deal's completion.


    Abilities combined


    Glocer declined to predict how long the takeover process would take but said disposals were unlikely.


    "We believe that the formation of Thomson-Reuters marks a watershed in the global information business"

    Pehr Gyllenhammar, chairman of Reuters' trustees

    "I would not expect we would need to make any divestitures," he said.


    The companies say the merger will combine Reuters' aptitude in handling real-time data and news and Thomson's reserves of historical information.


    "We believe that the formation of Thomson-Reuters marks a watershed in the global information business, and will underpin the strength, integrity and sustainability of Reuters as a global leader in news and financial information for many years to come," said Pehr Gyllenhammar, chairman of Reuters' trustees.


    The Thomson family, which owns 70 per cent of Thomson Corp via its Woodbridge holding company, backs the takeover.


    Some Reuters investors say the offer of 352.5 pence ($6.97) and 0.16 Thomson shares for each Reuters share is fair.


    At Monday's closing prices, the combined offer is worth 692 pence ($13.69) per share.


    Reuters shares gained 2.8 percent to 622.5 pence by 0802 GMT, a discount of 10 percent.


    Market leader


    Glocer said Thomson-Reuters will have revenues of more than $11 billion.


    Sixty per cent of the group's overall revenue will come from its financial information and news business, to be called Reuters.


    Forty per cent of overall revenue will come from the new Thomson-Reuters Professional arm, which will handle law, tax and science information.


    With 34 per cent of the financial information market, Thomson-Reuters will overtake Bloomberg LP, which has 33 per cent, according to Inside Market Data, an industry newspaper.


    As long as it remains under the control of the Thomson family, Woodbridge will own 53 per cent of Thomson-Reuters.


    This level of ownership is well above the 15 per cent shareholding limit set by the Reuters Trust Principles, which set ethics on maintaining integrity, independence and freedom from bias.


    Reuters journalists have expressed alarm at the takeover, claiming that the principles would be threatened if a single shareholder assumed majority control of the company.


    Unions representing Reuters staff in Britain, Canada and the United States wrote to the Reuters Founders Share Company on Monday expressing "deep concern".

    SOURCE: Agencies


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