Thomson-Reuters: Fierce Competitor, or Cozy Duopolist?

The rumors

were right: Thomson is indeed looking

to buy Reuters. The final price looks like it’s going to be about 700p per

share, or $17.6 billion, and the Reuters "Founders Share" structure,

which prevents hostile takeover bids, will be transplanted into the new Thomson-Reuters.

One way of making the target company more receptive to your bid: promise the

CEO that he’ll be in charge of the merged company. Reuters’ CEO is Tom

Glocer, and he seems positively

giddy about the deal: "I strongly believe that in combining our two

companies we would create a world leader in electronic media and publishing,"

he said in a memo to Reuters staff.

The big question is whether Thomson-Reuters will be a fierce competitor to

Bloomberg, or whether the two companies will settle down into a relatively cozy

duopoly, with every incentive to raise prices and little incentive to cut them.

After all, Bloomberg is famous for growing its market share while never discounting

its eye-wateringly expensive terminals. If Rupert Murdoch gets control of Dow

Jones, maybe he’ll inject a bit more competitive spirit into the financial-data

marketplace. But if he doesn’t, I think the regulators might want to think long

and hard about this proposed deal.

This entry was posted in Media. Bookmark the permalink.