Shareholders of Thomson Corporation and Reuters have approved plans for the Canadian firm to buy the British-based media and information group and create the world's biggest provider of financial data. The approval in separate shareholder meetings in Toronto and London clears the way for completion of the deal on April 17, the two firms said.
A statement issued from Thomson's operations headquarters in Stamford, Connecticut, said Wednesday that shareholders approved the plan overwhelmingly. It came moments after shareholders of Reuters voted in favour of the deal at a special meeting in London.
The takeover will create the biggest provider of financial information to trading floors, overtaking current market leader and US rival Bloomberg, and will merge the media operations of Thomson and Reuters, Agence France-Presse (AFP) reported.
Thomson was founded when Paul Julius Reuter began transmitting stock market quotations between London and Paris via the Calais-Dover cable in 1851. London-based Reuters is more focused on Europe, while Thomson—formally based in Toronto but run from Stamford, Connecticut—is stronger in North America.
Thomson agreed last year to buy Reuters for 8.7 billion pounds (11.5 billion euros, 17 billion dollars), creating a combined business called Thomson Reuters that will be led by Reuters' current chief executive Tom Glocer. "Thomson and Reuters will each now seek court approvals in Canada and the United Kingdom, respectively," the Thomson statement said. "The acquisition is expected to close on April 17, 2008." Regulators on both sides of the Atlantic have already cleared the acquisition, after requiring the divesting of some assets.
Along with the privately held US group Bloomberg, Thomson and Reuters currently dominate the market for providing financial data to banks, investment funds and other financial services firms. Many financial operators work with "Bloomberg screens" or "Thomson screens," or both.
To satisfy regulators, Reuters is to sell a copy of its databases of earnings estimates, company and economic data as well as broker research reports. Thomson, on the other hand, would sell a copy of its company financial database business.
At the time the deal was announced, the AFP report said, the two companies estimated that a combined Thomson-Reuters would have 34 per cent share of the financial information and data market compared with Bloomberg's 33 per cent. Reuters currently controls 23 per cent and Thomson 11 per cent.
US-based Interactive Data, owned by British group Pearson, is the closest runner-up, with a five percent market share. Dow Jones, bought last year by News Corporation, holds a three percent slice, as does US rival Factset. Switzerland-based Telekurs has a two percent share.
The takeover was announced last year amid a flurry of deal-making in the financial information market which saw media-entertainment conglomerate News Corp scoop up Wall Street Journal owner Dow Jones, the AFP report said.
Although 90 per cent of Reuters' revenue comes from financial services, the company is better known to the general public as a news agency with some 2,400 journalists in 131 countries. Thomson operates Thomson Financial News with 335 journalists around the world.
Calculated on the combined 2007 earnings of the two companies, the new data giant has about 12 billion dollars in annual sales and net profit of 1.6 billion dollars. It will employ nearly 49,000 workers and be listed on the Toronto and London stock exchanges. Thomson shares fell 2.5 per cent to 34.66 dollars in New York while Reuters' US-traded shares fell 0.3 per cent to 72.19, the AFP report said.
