LONDON - The Thomson Corp. said yesterday that Reuters chief executive officer Tom Glocer would lead the combined company if Thomson succeeded in its $17.5 billion bid for Reuters Group P.L.C., creating the world's biggest provider of financial news and information.
A combined Thomson-Reuters - the name proposed by Thomson - would have a market capitalization of about $45 billion and about one-third of the financial news market, leapfrogging current market leader Bloomberg L.P. in providing real-time data to traders and investment professionals.
The firms outlined details of the proposed deal for the first time yesterday, revealing that several issues already had been resolved. But they stressed that a buyout agreement had not been made final and that there was no certainty a deal would proceed.
Analysts were optimistic, saying the proposed offer of $7.03 per Reuters share in cash and 0.16 Thomson shares for each Reuters share was likely to go ahead without any major roadblocks.
While Reuters said discussions continued on a number of "material aspects of the deal," analysts pointed out that agreement already had been reached on the major points of potential contention, such as management issues.
The companies said in the joint statement that the new company would retain its primary stock market listings in Toronto and London, and that it would be controlled by the Thomson family, which now owns about 70 percent of the equity in Thomson Corp.
The companies said that Glocer would become CEO of Thomson-Reuters, and that Thomson president and chief executive Richard Harrington would retire.
"We don't see anyone else topping this offer, and we see the likelihood of a deal as high," ABN Amro Holding N.V. analyst Paul Gooden said.
In their joint statement, the two companies said there was a "powerful and compelling logic for the combination, which would create a global leader in the business-to-business-information markets."
Projected savings of $500 million within three years "is greater than we would expect to be deliverable in a deal with any other suitor," said Charles Peacock, analyst at Seymour Pierce Ltd., of London.
Thomson, formally based in Toronto but with its operational head office in Stamford, Conn., has transformed itself in the last decade from an owner of newspapers and other print products into a major provider of legal and financial information.
While London-based Reuters is known internationally for its general-news operation, that is just a small part of its business. Of the company's 2006 revenue of $5.11 billion, only $338.3 million came from the media segment - although the company's news gathering is a key selling point for terminals as well.
Reuters competes with Thomson and Bloomberg in the lucrative field of providing data terminals to the world's major banks and brokerages. Reuters was the market leader for years before steadily losing ground to Bloomberg.