Brussels, 20/02/2008 (Agence Europe) - On Tuesday 19 February, he European Commission cleared the proposed acquisition of the UK-based Reuters Group by Thomson Corporation of Canada. The parties made a number of commitments (particularly Thomson promising to divest the databases containing the content sets of such financial information products) which will prevent any distortion to competition occurring. This Commission decision concludes the Commission's investigation begun in October 2007 (EUROPE 9519).
The acquisition of the British Reuters group by the Canadian Thomson Corporation through a deal worth £8.1bn (€10.7bn), will create the biggest data base and information provider in the world. This new empire will knock the current number one, Bloomberg, off its perch.
The reduction from three to two main players in this sector provoked concerns from the Commission. The latter had fears about the new company being tempted to raise prices and creating a high level of consolidation in the material (screens, software etc.) provider market in this sector. Thomson had a relatively low profile in front-office services (which mainly involves stock market traders) and the investigation looked into overlaps in off-trading floor services (asset research and management for analysts in banks and pension funds). The Commission identified competition concerns involving distribution of aftermarket broker research reports, of earning estimates, of fundamental financial data of enterprises and of time series of economic data.
To remove the Commission's competition concerns, the parties committed to divest all the assets necessary to enable new competitors enter the market, namely, the databases containing financial product information and those on personnel and customer bases. The Commissioner said that it was satisfied with the fact that customers of such financial information products would continue to have sufficient alternatives post-merger.
The Commission's investigations, and negotiations of remedies, were undertaken in parallel with the examination of the case by the US Department of Justice (DOJ). The process involved close co-operation between the two authorities, including exchanges of views on analytical methods and of detailed information. The US competition authority also gave the operation the green light (the Canadian Competition Office did likewise).
Thomson is also active in legal, taxation, accounting and scientific market research, while Reuters is above all known for being one of the largest press agencies in the world. (C.D.)