Blackstone to take control of Thomson Reuters data arm in $17bn deal

(qlmbusinessnews.com via telegraph.co.uk – – wed, 31 January 2018) London, Uk – –

The private equity giant Blackstone is launching an attack on Bloomberg’s dominance of Wall Street and City trading floors via a $17bn (£12bn) debt-fuelled deal for control of the Thomson Reuters financial data business.

Under the deal, confirmed on Tuesday evening, the buyout firm will take a 55pc stake in the Thomson Reuters Financial & Risk division, which has annual revenues of $6.1bn.

It has struggled to dent Bloomberg’s lead in the lucrative financial data business despite adding heft when the family-controlled Canadian company Thomson bought Reuters in 2008.

Blackstone’s plan to make the Financial & Risk division independent under its direction sparked speculation yesterday that Bloomberg will face a stiffer challenge in future. It currently controls a third of the market, compared to less than a quarter for Thomson Reuters.

The Thomson Reuters board approved the deal late on Tuesday, though it still requires regulatory approvals.

It is expected to weaken the ties between the financial data business and the loss-making Reuters news service.

However, Blackstone has agreed to pay a minimum of $325m a year to the news service for 30 years. The fee for carrying news as part of its financial data package would cover Thomson Reuters’ current losses on journalism.

The structure will help guarantee the future of the Reuters newsgathering operation and is thought to be designed to appease the trustees of the Thomson Reuters Founders Share Company. It is designed to preserve Reuters journalism and could seek to block a transaction if it perceives a threat.

Blackstone will pay Thomson Reuters $17bn for control of its financial data division, comprised of $3bn cash and $14bn borrowed against the newly independent business.

As well as its news operation, Thomson Reuters will be left with its Legal and Tax & Accounting divisions. It will retain a 45pc stake in Financial & Risk.

By Christopher Williams

 

 

 

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