The trustees entrusted with supervising the uprightness and independence of the Reuters Group approved the acquisition of the company to the Thomson Corporation of Canada on Tuesday. However, the pace with which they went along with the deal has displeased some employees, who are afraid of the merger could weaken the excellence of Reuters’s journalism. Many financial analysts and investors have reacted favorably to Thomson’s plan to purchase Reuters for $17.2 billion, creating a convincing new competitor to Bloomberg in providing financial data on global markets. Tom Glocer, the chief executive of Reuters, is convinced that the company’s acquisition to Canadian rival Thomson will be cleared by regulators in the US and Europe over the coming months.
However, experts have argued that regulatory examination of the deal is foreseeable as it creates the world’s largest financial information provider. The combined company will have a global market share of 34 per cent compared with Bloomberg’s 33 per cent. The extent of any regulatory scrutiny will also be determined by the reaction to the deal among customers of the two companies.
The take over was settled after the Reuters Founders Share Company, which has the power to block any deal, approved the acquisition. Woodbridge, the largest shareholder in Thomson, has decided to use its 53 per cent controlling stake in the combined company to ensure that the Reuters Trust Principles are adhered to. Glocer, who will be appointed as the chief executive of the expanded Thomson Reuters business, said it will take months to win regulatory approval and the company will start to meet regulators over the coming weeks. 
The company expects to fuel revenue growth by giving a boost to the product set of the two businesses. Reuters makes available real-time information to trading rooms, while Thomson is much powerful in the investment banking sector. In terms of products, Reuters dictates control in foreign exchange while Thomson is dedicated in fixed-income, an area where Reuters has conventionally trailed Bloomberg. In addition, Reuters is strong in Europe and Asia, while Thomson does extremely well in America. Reuters’ clients are mainly sell-side traders, while Thomson’s are primarily buy-side fund managers. Reuters provides hard news versus Thomson’s analysis. Glocer has said that the acquisition will enable them to get where they wanted to organically but much faster.
In the meanwhile, market expert are of the view, ‘Antitrust authorities in Europe and the US are practically definite to apply a more detailed and lengthy examination of the purchase than is conventional, since the limited number of companies that supply prices, data, news and financial tools’. The US Department of Justice has said it was likely to review the deal. Multinational companies need approval from regulators in Brussels, Washington and elsewhere to conclude mergers.
The renamed Thomson-Reuters will maintain present listings on the Toronto Stock Exchange and on the New York Stock Exchange. It also will apply for its ordinary shares to be listed on the London Stock Exchange and plans to apply for its American Depositary Shares to be listed on Nasdaq.
Comments
Well, Balendu its being said tht this is the biggest deal in media field. hope it takes forward the entire field and jobs in the same sector rain in india. above all it should not hamper reuters credibility.
well said.