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.