Thomson-Reuters deal would raise U.S. antitrust issue

WASHINGTON (Reuters) - Canadian publisher Thomson TOC.TO would face an arduous investigation by U.S. antitrust authorities if it makes a bid to acquire news and financial data provider ReutersRTR.LRTRSY.O, antitrust law experts said on Friday.

Thomson Corporation Chairman David Thomson arrives at their annual meeting of shareholders in Toronto May 2, 2007. REUTERS/J.P. Moczulski

“It’s going to be a really tough investigation,” said one prominent antitrust lawyer who requested anonymity. “I’m not sure it’s doable.”

A combined Reuters and Thomson would reduce the number of major players in financial information, and give Toronto-based Thomson a lead in the market currently dominated by Reuters and privately owned Bloomberg.

However, such a deal could still win approval if an investigation showed that the market would remain competitive after the merger.

“If (the market) is defined narrowly, the market shares could be problematic. But there may be reasons why the market is not as narrow as one would think,” said Robert Doyle, a partner in the firm Doyle, Barlow & Mazard.

“And given the past history of mergers getting through in highly concentrated markets, this case stands a good chance of passing antitrust muster,” Doyle said.

Under U.S. antitrust law, authorities can sue to block any merger if their investigation concludes that it would substantially lessen competition.

Reuters faced close scrutiny in 2001 when it acquired some of the assets of Bridge Information Systems, a smaller competitor in the market for news and financial data. However, the deal was ultimately approved.

Some antitrust lawyers said the timing of the proposal could be key.

In recent years under the Bush administration, the Justice Department has taken a conservative approach to merger enforcement and has opposed few of the business deals that have come before it.

But if the November 2008 general election put a more activist Democrat in the White House, that administration may be more prone to file a lawsuit to block mergers in highly-concentrated industries, antitrust experts said.

“Under a different administration that would have a much more aggressive, enforcement-oriented antitrust program, this case would be in trouble,” Doyle said.