Thomson, Reuters agree on merger terms
AP ) - Reuters Group PLC and Thomson Corp. said Tuesday that they have agreed on terms for a merger to create one of the world's largest financial news providers.
The cash and shares transaction values Reuters at $17.2 billion.
Thomson, formally based in Toronto but with its operational head office in Stamford, Conn., would control about 70 percent of the shares in the new company, Thomson-Reuters PLC. The company will be headed by Tom Glocer, 47, who is now chief executive of Reuters.
Reuters trustees, who could have vetoed any takeover, endorsed the deal.
"We believe that the formation of Thomson-Reuters marks a watershed in the global information business, and will underpin the strength, integrity and sustainability of Reuters as a global leader in news and financial information for many years to come," said Pehr Gyllenhammar, chairman of the trustees.
Reuters competes with Thomson and Bloomberg LP in the lucrative field of providing data terminals to the world's major banks and brokerages. Reuters was the market leader for years before steadily losing ground to Bloomberg.
Thomson-Reuters will have roughly the same market share as Bloomberg.
An April report from Inside Market Data Reference said Bloomberg has 33 percent of the market share, with Reuters at 23 percent and Thomson at 11 percent.
Under terms of the agreement, holders of each Reuters share will be paid $6.99 in cash and 0.16 Thomson-Reuters PLC shares.
The value of the deal is calculated based on Thomson's closing share price of 48.46 Canadian dollars on the Toronto Stock Exchange on May 3, the day before the companies announced they were exploring a combination.
"For Thomson, it is a defining moment in our journey to become the information provider of choice for the world's business and professional markets," said Richard J. Harrington, Thomson's president and chief executive. Harrington, 60, will step down when the merger is completed.
London-based Reuters was born in 1851 when Paul Julius Reuter started sending stock market quotations between London and Paris via the new Calais-Dover cable.