Wed, Jan 31, 2018 - Page 10 News List

Blackstone in talks to buy Thomson Reuters unit

‘POTENTIAL PARTNERSHIP’:A sale would be one of the biggest restructurings of Thomson Reuters since Canada’s Thomson took over Reuters about a decade earlier

Bloomberg

Blackstone Group LP is in talks to buy a controlling stake in Thomson Reuters Corp’s key business that provides data, analytics and trading platforms to Wall Street and financial professionals around the world.

Blackstone is in talks to buy about 55 percent of the business, according to a person familiar with the buyer.

The unit, which does not include the news gathering operations, has a valuation of about US$20 billion, the person said, asking not to be identified because the financial details are confidential.

The discussions are about a “potential partnership” in the financial and risk division, which had US$6.1 billion in revenue in 2016, according to a statement late on Monday from the Toronto, Canada-based Thomson Reuters.

A deal would thrust Blackstone into the US$27 billion-a-year industry of financial market data and news, putting it in competition with Bloomberg LP and News Corp’s Dow Jones division in selling services and trading tools to financial professionals from Wall Street to London.

A sale of the business would be one of the biggest restructurings of Thomson Reuters since Canada’s Thomson took over Reuters about a decade back.

Blackstone already owns the financial technology firm Ipreo Holdings LLC, which it purchased together with Goldman Sachs Group Inc’s merchant-banking arm for US$975 million in 2014.

Blackstone declined to comment.

Bloomberg LP, the parent company of Bloomberg News, competes with Thomson Reuters in providing news, data and information to the financial industry.

Bloomberg LP chairman Peter Grauer is a non-executive director at Blackstone.

Thomson Reuters’ financial and risk unit includes Eikon, its flagship terminal that provides data, analytics and trading platforms for financial industry professionals.

The unit also sells regulatory and risk management solutions to customers.

Seventy-seven percent of the unit’s US$6.1 billion revenue came from subscriptions to its products and 15 percent from transaction fees.

While subscribers can access news through the Eikon terminal, Thomson Reuters differentiates its news organization Reuters, which employs about 2,500 journalists, from its financial products business.

“As part of any proposed partnership, Thomson Reuters would retain a significant interest in the F&R business and would retain full ownership of its legal, tax & accounting and Reuters News businesses,” Thomson Reuters said in the statement.

Bloomberg had a 33.4 percent market share according to 2016 data, compared with 23.1 for Thomson Reuters, according to data from Burton-Taylor International Consulting LLC.

Thomson Reuters shares have retreated 9.6 percent from their all-time closing high of US$48.06 in October last year, after third-quarter revenue missed analysts’ estimates.

The company has a market value of US$30.8 billion.

Chief executive officer James Smith attributed that shortfall to potential customers delaying decisions amid regulatory changes resulting from the EU’s Markets in Financial Instruments Directive, or MiFID II.

In 2012, Thomson Reuters sold its healthcare unit, which provided data and analysis to hospitals, government agencies and employers, to Veritas Capital for US$1.25 billion.

In 2016, it offloaded its intellectual property and science division to Onex Corp and Baring Private Equity Asia for US$3.55 billion.

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