Thomson Corp. has agreed to buy Reuters Group PLC for US$17.2 billion in a merger that will create one of the world's largest financial news providers.
Holders of each Reuters share will be paid $6.99 in cash and 0.16 Thomson-Reuters PLC shares -- the name of the new company.
Thomson, formally based in Toronto but with its operational head office in Connecticut, will control about 70 per cent of the shares in Thomson-Reuters PLC under the new deal.
The current chief executive of Reuters, Tom Glocer, will stay on to head the merger.
"We're creating a new force in a world of multiple information sources," Glocer said in a conference call with reporters.
Reuters currently competes with Thomson and Bloomberg LP in providing data terminals to the world's major banks and brokerages. In recent years, Reuters has steadily lost market share to Bloomberg.
An April report from Inside Market Data Reference said Bloomberg holds 33 per cent of the market, Reuters holds 23 per cent and Thomson holds 11 per cent.
Reuters trustees, who had the power to veto any takeover, backed 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.
By the third year into the deal, the merger is expected to garner $500 million in savings.
"The companies will be separate legal entities but will be managed and operated as if they were a single economic enterprise,'' the announcement said.
"The boards of the two companies will be identical and the combined business will be managed by a single senior executive management team.''
With files from The Associated Press
