A group led by Blackstone Group LP agreed to buy a majority stake in Thomson Reuters Corp.'s financial and risk unit in a deal that values the business at $20 billion, sealing plans for the firm's biggest buyout in a decade.
Tuesday's deal gives Thomson Reuters a powerful new partner and stable, long-term capital to compete more aggressively for space on desks at banks, trading houses and hedge funds.
Thomson Reuters said it will receive about $17 billion in proceeds, consisting of $3 billion from the Blackstone-led group and $14 billion in debt and preferred equity.
Bloomberg had a 33.4 percent market share, according to 2016 data, compared with 23.1 for Thomson Reuters, according to Burton-Taylor International Consulting LLC. A spokeswoman for GIC declined to comment.
"Reuters News will maintain complete editorial freedom, and continue to operate under the Trust Principles".
Thomson Reuters announced that it has signed a definitive agreement to enter into a strategic partnership with Blackstone.
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Thomson Reuters retains a 45-per-cent stake in the financial and risk business.
The division's current leadership under president David Craig will lead the transition to the new company, where they are expected to join forces with Blackstone staff under a new board of directors. The deal would not involve Thomson Reuters' worldwide news service or its legal, tax, and accounting divisions.
Pursue organic and inorganic opportunities in the key growth segments of the company's Legal and Tax & Accounting businesses (estimated at $1 - $3 billion).
Fourth-quarter EPS is projected to be down approximately 75% primarily due to a $2 billion gain realized in 2016 on the sale of the company's IP & Science business. It will add to the $105 billion of private equity deals targeting the media and technology industries over the past 12 months, according to data compiled by Bloomberg. The Thomsons, descended from company founder Roy Thomson, remain some of the richest people in Canada.
Woodbridge Co. Ltd., the Thomson family holding company that now owns 63 per cent of Thomson Reuters, plans to take part in the share repurchases, maintaining an ownership stake of 50 to 60 per cent. Woodbridge also owns The Globe and Mail.
Thomson Reuters' board is expected to meet today to discuss Blackstone's offer for the F&R business, which contributes more than half of Thomson Reuters' annual revenues.