Tuesday, February 19, 2008

Antitrust Regulators Approve Thomson’s Acquisition of Reuters

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

The Department of Justice and the European Commission (EC) have approved the combination of financial information providers Thomson Corporation and Reuters Group PLC subject to the parties’ agreement to sell financial data and related assets aimed at preserving competition. The Canadian Competition Bureau also signed off on the transaction, saying that its competition concerns were alleviated by remedies negotiated with the U.S. and European authorities.

According to the parties, all regulatory approvals needed to close the transaction have been obtained. The companies expect the transaction to close in April.

Justice Department’s Required Divestitures

The Justice Department will require Thomson to sell financial data and related assets in three markets for financial data in order to proceed with its proposed $17 billion acquisition of Reuters, under the terms of a proposed consent decree.

The consent decree, if approved by the federal district court in Washington, D.C., would resolve concerns that the transaction, as originally proposed, likely would have resulted in higher prices to purchasers of three important types of financial data used by investment managers, investment bankers, corporate managers, and other institutional customers in making investment decisions and providing advice to their firms and clients.

To preserve competition, Thomson must, within 60 days, sell copies of three financial datasets—fundamentals data, earnings estimates data, and aftermarket research reports—and must license related intellectual property to a firm or firms that will use the data in order to offer products and services in competition with the combined firm.

EC Requirements

The remedies contained in the proposed consent decree with respect to three financial data markets were consistent with those obtained as a result of an antitrust investigation by the EC, according to the Justice Department. The EC, based on market conditions in Europe, required divestiture of a copy of Reuters’ Economics database to meet EC concerns in a fourth category.

Thomson’s Reaction

In a February 19 statement, Thomson said that “in order to obtain clearance, it has agreed to sell a copy of the Thomson Fundamentals (Worldscope) database, and Reuters has agreed to sell a copy of the Reuters Estimates, Reuters Aftermarket Research and Reuters Economics (EcoWin) databases.” Thomson also said that it 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.”

The complaint and proposed consent decree is U.S. v. Thomson Corp. and Reuters Group PLC, Civil Action No. 08-00262, February 19, 2008. The Justice Department announcement appears here on the Antitrust Division’s website.

No comments: