Canadian firm buys Reuters for 8.7 bn pounds
May 15, 2007 - 3:02:16 PM
London, May 15 - More than 150 years after Paul Julius Reuter opened an office in London to launch what became a global news information major Reuters, the company agreed on Tuesday to a takeover proposal by Canadian firm Thomson in a deal worth 8.7 billion pounds.
Reuters' merger with Thomson creates the world's biggest financial news and data firm, bigger than its US-based rival, Bloomberg. Economies of scale in news agencies have forced other news agencies to consider such tie-ups to reduce costs.
Reuters and Thomson believe that the deal will save them 250 million pounds a year.
Following the merger, the new company will be called Thomson-Reuters. It will have annual revenues of about $12bn and almost 49,000 employees.
David Thomson, chairman of Thomson, said: 'We are enormously proud of the evolution of The Thomson Corporation and the value it has created for all our shareholders. We recognise the rich history of Reuters and are committed to uphold the Reuter Trust Principles.'
Niall FitzGerald, chairman of Reuters, said: 'This is an historic day for Reuters and represents an important chapter in the development of our company and the commitment to our heritage. The shared expertise and complementary strengths of these two companies makes for a strategically compelling and financially attractive combination.
'I am especially proud that Reuters journalism will continue to be governed by the powerful Reuter Trust Principles of independence, integrity and freedom from bias.'
Tom Glocer, CEO of Reuters, said: 'I am looking forward to the opportunity of being the first CEO of Thomson-Reuters. The combination of these two great businesses will create an exceptional global information company guided by the Reuter Trust Principles. It will provide a broader offering to our customers'.
According to industry estimates released in April, Bloomberg has a 33 percent share of the terminal market, with Reuters controlling 23 percent and Thomson 11 percent.
Thomson-Reuters will be listed on stock exchanges in London and Toronto.
However, Reuters journalists were reported to be unhappy with the deal because of concerns that over time Reuters general news operations will become marginalised within an outfit that sees its future as supplying intelligence and tools to those who operate in global financial markets.
It was in October 1851 that Paul Julius Reuter, a German-born immigrant, had started his venture. He opened an office in the City of London which transmitted stock market quotations between London and Paris via the new Calais-Dover cable.
Two years before that he had used pigeons to fly stock prices between Aachen and Brussels, a service which operated for a year until the gap in the telegraph link was closed. Reuters eventually extended its service to the whole British press as well as to other European countries.
India figured prominently in the company's expansion during the British rule. The company has lately outsourced several of its editorial functions in Bangalore, where it employs Indian journalists to cover global financial news.
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