Thomson to buy Reuters for $17bn

Media giant Reuters said the $17.2 billion cash and stock takeover offer from Thomson Corp has been approved by its board and trustees, who had the power to veto the deal - paving the way for the biggest deal in the financial information space.

The two companies, in a joint statement, said their boards have decided to unanimously recommend the transaction to their respective shareholders.

They said that Reuters Founders Share Company, which controls a special "golden" share that can block any hostile takeover attempt, has resolved to support the deal.

Woodbridge, the Thomson family holding company which controls about 70% of Thomson, has also committed to vote in favour of the deal, the statement said.

The merged entity, to be called Thomson-Reuters, would be listed in London as well as Toronto, and would be headed by incumbent Tom Glocer, CEO, Reuters. The combination of Reuters' financial and media businesses and Thomson Financial unit would retain the Reuters brand.

The merged entity would be the largest financial data provider, with 34% market share against Bloomberg's 33%.

The two companies have maintained that a potential deal would result in annual synergies worth over $500 million within three years.

Under the transaction, Reuters will be bought by a newly formed holding company, Thomson-Reuters PLC, through a scheme of arrangement in which each Reuters share will be entitled to 352.5 pence in cash and 0.16 Thomson-Reuters PLC shares.

The offer values the entire existing issued share capital of Reuters at approximately pound 8.7 billion ($17.6 billion).

Thomson had entered India last year and currently has a staff strength of 25. With this acquisition, Thomson will gain Reuters' more than 500 customers and 1,900 subscribers in India supported by a staff of over 100.

Reuters also has a large outsourcing office in Bangalore, which Thomson can now leverage to service its clients. Thomson will also get access to Times Now, the 24-hour English news channel, which is a joint venture between Times Global Broadcasting Company and Reuters. (BS Reporter)