Thomson gets approval to buy Reuters for $16 Bn

Thomson Corp. won European regulatory approval Tuesday to buy news and information provider Reuters Group PLC but must sell off financial research units to eliminate antitrust concerns, the European Commission said.

EU regulators said the two companies had also agreed with the U.S. Department of Justice that Reuters would divest divisions that supply financial-market research reports, earnings estimates and economic data archives while Thomson would shed some basic financial data on companies.

The EU said this was necessary to make sure financial institutions and customers of these products were not faced with "a reduced choice, the likelihood of price increases and a severe risk of discontinuation of overlapping products."

EU Competition Commissioner Neelie Kroes said the two companies had offered a package "that provides strong safeguards that users of financial data will not be harmed by this major consolidation."

Thomson's 8.1 billion pound ($15.8 billion) deal for Reuters would cut the number of major companies selling information and trading systems to the financial services industry from three -- Reuters, Thomson and privately owned Bloomberg LP -- to just two.

The combination of Reuters, founded when Paul Julius Reuter began transmitting stock market quotations between London and Paris via the new Calais-Dover cable in 1851, and relative newcomer Thomson would generate sales in excess of $11 billion and just edge out Bloomberg in market share.