Saturday

25th May 2019

EU approves Reuters-Thomson merger

  • The UK-based Reuters, newswire and financial data service, was purchased for €11.5 billion. (Photo: wikipedia)

The European Commission has approved Thomson's acquisition of Reuters, a move that opens the door to the creation of the largest financial news and information service in the world, but cuts the number of major firms in the sector from three down to two.

Having been given a green light on Tuesday (19 February), Thomson, the Canadian financial information and workflow software provider, is to purchase UK-based Reuters, the newswire and financial data service, for €11.5 billion.

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However, to meet commission anti-trust demands, the two firms must divest themselves of copies of certain market information databases.

In order to obtain clearance, Thomson has agreed to sell a copy of the Thomson Fundamentals (Worldscope) database and Reuters has agreed to sell a copy of the Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) databases.

Divestiture of copies of these databases means that the firms may continue to retain full ownership of them, but may not sell the information within them on to others.

The commission said that without such divestitures, the merger would reduce choice and raise prices.

Thomson and Reuters must now each seek shareholder and court approvals, but the companies expect the deal to be completed by 13 April.

The approval of the merger means that there will now be only two major firms providing information and trading systems to the financial sector, down from three.

EU officials investigated the merger and negotiated the settlement package in concert with US regulators.

The other major provider is Manhattan-based Bloomberg, founded by the current mayor of New York, Michael Bloomberg.

Following the merger, the new combined firm will have two divisions – 'Markets', which will focus on financial market information; and 'Professionals', which will focus on legal and healthcare information.

Although Thomson is a relatively new player on the news and information provision scene, Reuters dates back to 1850, when founder Paul Julius Reuter used a combination of the electric telegraph and homing pigeon to send news from Brussels to Berlin.

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