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Reuters agrees to Thomson buyout Reuters agrees to Thomson buyout
(30 minutes later)
News and information group Reuters has agreed to be bought out by Canadian financial data provider Thomson in a deal worth about £8.7bn ($17bn).News and information group Reuters has agreed to be bought out by Canadian financial data provider Thomson in a deal worth about £8.7bn ($17bn).
The tie-up will create the world's biggest financial news and data firm, allowing the new company to leapfrog its main rival, US-based Bloomberg.The tie-up will create the world's biggest financial news and data firm, allowing the new company to leapfrog its main rival, US-based Bloomberg.
Other news firms are also eyeing deals as they seek to cut costs, squeeze rivals and increase their client base.Other news firms are also eyeing deals as they seek to cut costs, squeeze rivals and increase their client base.
Reuters and Thomson reckon their deal will save them $500m (£250m) a year.Reuters and Thomson reckon their deal will save them $500m (£250m) a year.
Thomson has been expanding its non-data business, and Reuters will complement its news operations in the US and AFX in Europe, analysts said. Broader reach
They added a merged Thomson and Reuters would be in a stronger position to compete with Bloomberg. Thomson, whose publishing interests include law, tax and scientific research, has been expanding its non-data business.
Reuters will complement its news operations in the US and AFX in Europe, analysts said.
They added that a merged Thomson and Reuters would be in a stronger position to compete with Bloomberg.
The expertise and strengths of the two firms makes for a strategically compelling and financially attractive combination Reuters Check Reuters' shares Q&A: Proposed Reuters sale
The three companies are rivals in the "terminal" market, providing news and financial data on stocks, currencies and bonds to banks, traders and brokerages.The three companies are rivals in the "terminal" market, providing news and financial data on stocks, currencies and bonds to banks, traders and brokerages.
Industry figures released in April, estimated that Bloomberg had a 33% share of the terminal market, with Reuters controlling 23% and Thomson 11%. According to industry estimates released in April, Bloomberg has a 33% share of the terminal market, with Reuters controlling 23% and Thomson 11%.
Following the merger, the new company will be called Thomson-Reuters and will be listed on stock exchanges in London and Toronto.Following the merger, the new company will be called Thomson-Reuters and will be listed on stock exchanges in London and Toronto.
Reuters boss Tom Glocer will head the newly enlarged firm. It will have annual revenues of about $12bn and almost 49,000 employees.
"The shared expertise and complementary strengths of these two companies makes for a strategically compelling and financially attractive combination," said Niall Fitzgerald, chairman of Reuters.
Top man
According to the terms of the deal, Reuters shareholders will get 352.5 pence in cash and 0.16 Thomson share for every Reuters share they own.
That values Reuters shares at 692p each, the companies said in their statement.
Reuters boss Tom Glocer will head the enlarged firm, while Thomson president and chief executive Richard Harrington will retire.
The Thomson family will own 53% of the new firm through its Woodbridge investment vehicle.
Tuesday's deal still needs approval from competition regulators, and some analysts questioned whether they would get the go-ahead.
Concerns about getting approval for the deal have dented Reuters' share price, trimming some of its gains for this year. The company's shares have added more than 30% since the end of 2006.