Reuters Agrees To Merge With Thomson; Regulatory Scrutiny To Follow

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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Comments

[Mr. Finance]

Here is an excerpt from the May 4, 2007 post on the NewsVisual.com blog titled "Visual Analysis of Thomson's Possible Acquisition of Reuters"

Automatically generated Knowledge Map by IntellectSpace shows common relationships that Thomson has with Reuters. These relationships involve primarily board position and non-profit relationships.

According to the Knowledge Map (URL Below), Steven A Denning, Michael Sabia, Mary Cirillo, and John Thomson who sit on the board of Thomson have multiple ways into the board of Reuters through IBM, Cisco, Royal Dutch Shell, Council on Foreign Relations, and other organizations.

To experience an interactive version of this publicly available Knowledge Map, navigate or paste the following link to your Internet Explorer browser: fn.intellectspace.com/...