Thomson and Reuters tie the knot to create financial info giant

With the ink barely dry on the sale of Thomson Learning, the Thomson Corporation has succeeded, barring regulatory problems, in taking over news provider Reuters. The deal worth £8.7 billion will create the world’s largest news and financial data provider. 

The BBC claims the deal is not popular amongst Reuters reporters and some users because Reuters legendary independence is  now in question.

By merging together Thomson-Reuters, as the new company will be know, has leap forged market dominator Bloomberg, the US provider owned by the mayor of New York. Michael Bloomberg.

Reuters and Thomson believe the tie up will create £250 million in savings, although no specific plans on these savings have  been released yet. A statement did highlight that together Thomson and Reuters will be in a better position to compete with Bloomberg. Niall Fitzgerald, Reuters chairman said in a statement,  “The shared expertise and complementary strengths of these two companies makes for a strategically compelling and financially attractive combination.” 

Reuters, Thomson and rival Bloomberg compete fiercely in the financial terminal information market used by stock exchange traders.

Great Britain

’s Reuters is also famed for its news agency that supplies news coverage to the world’s newspapers and broadcasters. Bloomberg has 33% of the terminal market, according to analysts figures out in April 2007, with Reuters holding 23% and Thomson 11%.

The new company will be listed  on both the

London

and

Toronto

stock exchanges and will have an annual revenue of around $12 billion.

According to the BBC, the merger could damage Reuters standing as an independent source of news information. “For more than 150 years, Reuters has been one of the great independent news organisations. No longer,” said Robert Peston, BBC Business Editor on the Radio 4 Today programme. “Reuters’ independence has been guaranteed by the structure of the business, which prohibits any individual from owning 15% or more of the company.”

He went on to say that Reuters journalists are unhappy with the deal because the “prohibition is being waved for the Thomson family” which will now own 53% of the new larger business.

One clear winner is Tom Glocer who has led Reuters back to health and presided over the sell off of its half of the Factiva business. Glocer will now take over the helm of Thomson-Reuters when Richard Harrington, Thomson president and chief executive retires.