Wednesday, May 16, 2007

Thomson Corp Buys Reuters

Canadian publisher Thomson Corp has agreed to buy Reuters for about $17.2 billion to create the world's biggest financial news and data group, the companies said on Tuesday. 8.7 billion ($17.2 billion) cash and stock takeover offer from Thomson Corp has been approved by its board and trustees, who had the power to veto the deal.


The deal has the support of the Reuters Founders Share Company but still needs regulatory clearance, they said in a joint statement.




Woodbridge, the Thomson family holding company which controls about 70 per cent of Thomson, has also committed to vote in favour of the deal, the statement said. At Monday's closing prices, the offer is worth 692 pence per share. Reuters shares closed at 605-1/2 pence, a discount of 12.5 per cent, reflecting concern that regulators may object to reduced competition in financial data.

The new entity will be name as Thomson-Reuters. The merged entity would be the largest financial data provider, with 34 per cent market share against Bloomberg's 33 per cent. The two companies have maintained that a potential deal would result in annual synergies worth over $500 million within three years.

The Thomson family's Woodbridge vehicle will own 53 per cent of the new dual-listed Thomson-Reuters group.
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