Reuters agrees to $17.2B Thomson buyout
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LONDON (AP) — Reuters agreed on Tuesday to a $17.2 billion takeover by Thomson that would vault the combined entity ahead of Bloomberg to become the world’s largest financial data and news provider.
The combined company will be headed by Tom Glocer, 47, who is now chief executive of Reuters, and he will be responsible for finding the $500 million in savings the companies are promising to deliver by the third year.
Reuters trustees, who could have vetoed any takeover, endorsed the deal, which is still subject to approval by shareholders and regulators.
“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 the trustees.
Holders of each Reuters Group PLC share traded in London will be paid the equivalent of about $7 in cash and 0.16 shares of Thomson Corp.’s Toronto-listed stock.
The value of the deal is calculated based on Thomson’s closing share price of 48.46 Canadian dollars on the Toronto Stock Exchange on May 3, the day before the companies announced they were exploring a combination.
Shareholders of Thomson, formally based in Toronto but with its operational head office in Stamford, Conn., would control more than three quarters of the shares in the new company, Thomson-Reuters PLC.
Woodbridge, the Thomson family holding company which controls roughly 70 percent of Thomson, will own approximately 53 percent of the combined business. Other Thomson shareholders will have 23 percent and Reuters shareholders 24 percent, the companies said.
Reuters and Thomson compete with Bloomberg LP, founded by New York Mayor Mike Bloomberg, in providing data terminals to the world’s major banks and brokerages. Reuters was the market leader for years before steadily losing ground to Bloomberg.
An April report from Inside Market Data Reference said Bloomberg has a 33 percent share of the market, with Reuters holding 23 percent and Thomson 11 percent.
“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,” said Richard J. Harrington, Thomson’s president and chief executive. Harrington, 60, will step down when the merger is completed.
London-based Reuters was born in 1851 when Paul Julius Reuter started sending stock market quotations between London and Paris via the new Calais-Dover cable.
Reuters shares rose 3.1 percent to 624.5 pence ($12.38) on the London Stock Exchange at midday.
The merged companies will have a dual-listed structure.
The renamed Thomson-Reuters will retain current listings on the Toronto Stock Exchange and on the New York Stock Exchange. It also will apply for its ordinary shares to be listed on the London Stock Exchange and intends to apply for its American Depositary Shares to be listed on Nasdaq.
“The companies will be separate legal entities but will be managed and operated as if they were a single economic enterprise,” the announcement said. “The boards of the two companies will be identical and the combined business will be managed by a single senior executive management team.”
The combined Thomson Financial unit and Reuters financial and media businesses will be called Reuters.
Thomson’s professional businesses – legal, tax and accounting, scientific and healthcare – will be branded as Thomson-Reuters Professional.
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