News provider Reuters agreed to be bought by Canada's Thomson Corp. for £8.7 billion ($17.24 billion) in a cash and stock offer, setting off a what promises to be long battle to win regulatory clearance on multiple continents. Thomson CEO Richard Harrington will retire and Reuters CEO Tom Glocer will become CEO of the newly combined company, to be named Thomson-Reuters. The Thomson family will hold 53% of the combined company, which will be listed in New York and London. Thomson and Reuters are currently the second and third largest providers of financial information globally. Because there are already so few companies providing the world's financial institutions with such information, the Wall Street Journal believes antitrust authorities in Europe and North America are "almost certain to apply a more detailed and lengthy review of the acquisition than is typical." The financial institutions themselves are thought to favor the merger as stronger competition for Bloomberg, which has raised subscription prices several times in recent years. Thomson-Reuters is confident the merger will be approved eventually, but admit the process may take as long as 12 months due its complexity.
Sources: Press Release, Wall Street Journal, Bloomberg, New York Times, Reuters, Financial Times
Commentary: Thomson Shares Should Rise 20% on Reuters Buyout - Barron's • Deutsche Bank: Thomson-Reuters Combo Would Have Leakage, Be Anti-trust Risk • Reports Say Reuters Trustees to Support Thomson Takeover • Reuters, Thomson Confirm They Are Negotiating $17.5 Billion Deal
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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