Tuesday, Thomson Corp. (TOC, TOC.TO) said it has received clearance from the European Commission, US Dept. of Justice and Canadian Competition Bureau for its proposed acquisition of Reuters (RTRSY, RTR.L), which would create the world's leading provider of news and data for professional markets.Last month, Thomson and Reuters had expressed high degree of confidence with regard to obtaining approval for the deal, under which the Canada-based Thomson would acquire London-based Reuters in a $17.2 billion cash and stock transaction. For obtaining the regulatory clearance, Thomson has agreed to sell a copy of the Thomson Fundamentals (Worldscope) database, while Reuters would sell a copy of the Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) databases. In addition, the sales include copies of the databases, source data and training materials, as well as certain contracts and employees connected to the databases.However, Thomson and Reuters retain full ownership of the relevant databases and these undertakings do not affect Thomson's and Reuters' ongoing business or capabilities in these areas. Also, the companies need not required to complete the sales before the closing of the acquisition. For technical reasons related to the dual listed company structure contemplated for Thomson-Reuters, the transaction is not subject to the filing and waiting period requirements of the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976. As a result, the Department of Justice has conducted a review of the transaction similar to a Hart-Scott-Rodino review.As all the regulatory approvals for closing the transaction have now been obtained, Thomson and Reuters will each now seek shareholder and court approvals. The companies expect the deal to consummate in the week of April 13, 2008.The merger will be effected through a dual listed company structure that will let Thomson-Reuters be listed in Canada, the U.K. and the U.S. Reuters CEO, Tom Glocer will lead the combined business, while Thomson President and CEO, Richard Harrington, will leave, upon the closure of the deal.Commenting on the regulatory approvals, Tom Glocer, currently CEO of Reuters and CEO designate of Thomson Reuters, said, "This is an important step toward completing the transaction and creating what we believe will be the leading provider of information and related applications to businesses and professionals around the world."In May, Thomson offered to acquire Reuters in a deal worth about 8.7 billion or $17.2 billion. Thomson Corp.'s offer to buy Reuters came under closer European Union, or EU, scrutiny after the Commission's initial market investigation indicated that the merger would raise serious doubts as regards adverse effects on competition in several markets of the financial information sector.The Commission's initial probe highlighted that the combination would raise competition concerns notably with regard to the supply of financial information, such as the provision of data-feeds, the access to specific financial information databases commercialized by the notifying parties, the access to real-time and broker reports and the provision of news services. Most of these products are predominantly used in off-trading floor activities of financial institutions.Both Thomson and Reuters are leading financial information providers. The companies source, aggregate and disseminate market data content needed by financial professionals such as banks, fund managers, corporates, wealth managers and traders. Both companies also provide trading capabilities to their customers. In addition, Thomson is active in legal, fiscal, accounting and scientific research markets whereas Reuters is best known as one of the largest international news agencies.The merger between Thomson and Reuters would stitch together two companies with strength in disparate geographies and business areas. Thomson is stronger in the U.S., but weak in other global markets around the world, while Reuters has a strong presence in Europe, Asia, the Middle East and Africa but weaker in the U.S. Thomson's services lean toward investors, who buy securities, commodities and foreign currencies, while Reuters is geared more towards traders.Reuters and Thomson share the midlevel market for trading customers, while Bloomberg currently dominates in serving higher-end customers. The London-based Reuters have market cap of $14.68 billion, while the Stamford, Connecticut-based Thomson's market cap stood at $21.42 billion. As a result, the combined company is expected to have a market cap in excess of $36 billion.The combination of Thomson and Reuters may help the companies compete more effectively against privately held Bloomberg, the market leader in providing financial information and data services. An April report from Inside Market Data Reference said that Bloomberg has 33% of the market share, trailed by Reuters at 23% and Thomson at 11%.The combined business, which would be called as Thomson-Reuters, would have a market share of 34%, surpassing Bloomberg's 33% market share. The companies also expect to save more than $500 million annually in three years after the combination.Thomson shares are currently trading in NYSE at $33.59, down 81 cents or 2.35%. In Toronto exchange, Thomson stock is lower by 66 cents and trading at C$34.14.On the other hand, Reuters stock is up 7 cents at $71.70. In LSE, Reuters ended Tuesday's regular trading session at 605.50, down 1 pence.
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