'Good progress' in Reuters-Thomson merger plans

International news agency Reuters is making “good progress” in preparing for its proposed merger with Canadian publisher Thomson, which it hopes will be completed early next year, the company said today.
In its third quarter results, Reuters said it had weathered the recent turbulence in worldwide financial markets, with revenue growth across the entire company.

On a like-for-like basis, revenues were up 7.6 per cent year on year to £646m. This was slightly reduced by the weak dollar and further weakness in the euro and yen currency markets, the company said.

Reuters’ agency services contributed £35m to the group’s overall revenue for the quarter – due to “strong sales” to existing and new customers, especially in the sale of pictures and TV services.

The company has seen especially strong growth in Asia – particularly Japan – with revenues in this region up 10 per cent this year.

The Reuters Founders Share Company – the body set up to protect the agency’s independence – agreed in May to the £8.7bn merger with Thomson.

The Canadian media giant agreed to pay 691p per share for a 53 per cent stake in the firm. The merger is subject to regulatory approval.

A profit figure for the quarter was not revealed because the company is an “offer period” over the Thomson deal.

Reuters chief executive, Tom Glocer, said he was pleased with the progress being made with planning the integration with Thomson.

A clear timetable had been set by the European and US competition authorities, and Glocer said he hoped the merger would be given regulatory clearance early next year.

“This is a good set of numbers that shows our performance has not been impacted by the turbulence in the credit markets, nor any distraction from the Thomson deal,” he said.

“While we remain vigilant for signs of continuing market instability, we believe that the transformation of Reuters over the past several years has better positioned the company to weather the effects of a market downturn.”

Earlier this month, it was reported that the European Commission had raised “serious doubts” about fair competition in the market for financial information if the merger went through.

The Commission is carrying out an in-depth investigation into the move, the result of which is due no later than 25 February next year.

A combination of Reuters and Thomson would give Thomson a bigger stake in a market currently dominated by Reuters and Bloomberg.

All three provide financial information to banks, fund managers, corporate groups, wealth managers and traders, as well as trading news for their customers.

Reuters is best known as one of the largest international news agencies and Toronto-based Thomson specialises in legal, fiscal, accounting and scientific research markets.

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