BRUSSELS/WASHINGTON Regulators in Europe, the United States and Canada conditionally approved Thomson Corp's acquisition of Reuters, a deal that will create the world's leading provider of news and data for professional markets.
Thomson and Reuters said on Tuesday they had agreed to sell copies of their financial databases -- Thomson's Worldscope, Reuters Estimates, Reuters Aftermarket Research and Reuters EcoWin -- in order to meet the regulators' conditions.
The sales include copies of the databases, source data and training materials as well as contracts and an undisclosed number of staff, but Thomson and Reuters retain ownership of the data, the companies said in a statement.
Reuters Chief Executive Tom Glocer, who will head the enlarged group, said in a call with reporters that the two companies were already in talks with other businesses.
"We don't believe, given the interest in these assets, that disposal will be an issue," he said.
Thomson and Reuters expect the deal to close in the week of April 13, following shareholder and court approvals. The companies are not required to complete the sales before the closing of the transaction.
The European Commission said the disposals would allow purchasers to "quickly establish themselves as a credible competitive force in the marketplace in competition with the merged entity".
Thomson announced its takeover in May with a deal that when closed will see Reuters shareholders get 352-1/2 pence in cash and 0.16 of one Thomson share for each Reuters share held.
The deal values Reuters at around 627 pence per share or 7.8 billion pounds ($15.2 billion), based on the value of the two companies shares shortly after the regulators' decisions were released.
Shares in Reuters, which were trading at 605p ahead of the announcement, ended the day at 605.5 pence, down 0.2 percent.
Two analysts, who declined to be named, said the weakness reflected ongoing investor concerns about the company's exposure to financial markets as the fallout from the credit crunch and a run of subprime-related losses hit leading investment banks.
Glocer said that nothing had caused him to change his view from the end of January that 2008 had started well for Reuters.
Thomson and Reuters have said they expect to make over $500 million of annual synergies within three years of completion.
Thomson, whose subscription-based publishing interests span law, tax, scientific research and healthcare, has been extending its financial reach as it taps deeper into global markets.
The deal helps reduce Reuters exposure to volatile financial markets. It also adds Reuters strength in sales and trading to Thomson's base with money managers and investment bankers.
"I think it's a logical merger. It looks like it will take the number one position away from Bloomberg, in terms of being a financial information industry provider," said Ian Nakamoto, a director of research at Toronto-based MacDougall & MacTier.
Analysts including ABN AMRO have cut their ratings and price targets on Reuters recently amid concerns about what impact the credit crisis will have on bank profits and staff numbers.
Investment banks and financial institutions worldwide have cut tens of thousands of jobs as a result of the lingering U.S. subprime mortgage crisis and its knock-on effects.
(Reporters and editors involved in writing and editing this report may own Reuters securities and are bound by the Reuters Code of Conduct, which restricts dealing in securities in companies on which a journalist is reporting)