Reuters, Thomson Confirm They Are Negotiating $17.5 Billion Deal

Canadian financial data company Thomson Corp. is in negotiations to buy Reuters Group plc for ₤8.77 billion ($17.5 billion), the two companies confirmed Tuesday. The combination would create the biggest news and financial data company in the world. Thomson plans to offer 352.5 pence in cash and 0.16 Thomson share for each Reuters share. That offer values each Reuters share at 697 pence, a 13% premium to the May 4 closing price. Reuters shares gained 7% to 659 pence after the joint statement was released; they surged a record 25% on May 4, when news broke of a possible takeover. Thomson-Reuters will be run by Reuters CEO Tom Glocer; Thomson CEO Richard Harrington plans to retire when the acquisition is completed. The two companies are expected to have total combined sales of about $11 billion. Reuters would increase Thomson's share of the financial data market to 34% from 11%, bringing it ahead of rival Bloomberg's 33% share. Thomson and Reuters expect combined savings of $500 million within three years. Thomson, Reuters and Bloomberg compete with Dow Jones, which itself received a received a $5 billion takeover offer from Rupert Murdoch's News Corp. on May 1.

Sources: MoneyCentral, Bloomberg, Reuters
Commentary: Thomson/Reuters Merger Would Face Shareholder Obstacle • Thomson and Reuters: Seeking The 'Smart Pipe' of Financial Content • Reuters Merger Speculation: Thomson, News Corp Possible Suitors
Stocks/ETFs to watch: Reuters Group plc [ADR] (RTRSY), The Thomson Corporation (TOC). Competitors: Dow Jones & Co. Inc. (DJ), FactSet Research Systems (FDS), The New York Times Co. (NYT), News Corp. (NWS)

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