US private equity firm Blackstone Group LP has catapulted itself into the big leagues of Wall Street's financial information industry with the acquisition of a majority stake in the Financial and Risk business of Thomson Reuters Corporation.
The deal, announced by the companies in a statement on Tuesday is Blackstone's biggest bet since the financial crisis.
Co-founder Stephen Schwarzman will go head to head against fellow billionaire and former New York mayor Michael Bloomberg, whose eponymous terminals are the market leader in providing traders, bankers and investors with news, data and analytics..
Under the acquisition, Blackstone acquire a 55 per cent stake in a newly hived off F&R business, the statement said.
Thomson Reuters will retain a 45 per cent holding and will receive approximately $US17 billion, including about $US3 billion in cash and $US14 billion of debt and preferred equity issued by the new business, the companies said.
The new partnership will be managed by a 10-person board composed of five representatives from Blackstone and four from Thomson Reuters. The President and CEO of the new partnership will serve as a non-voting member of the board following the closing of the transaction. The companies did not say who that person would be.
The biggest sticking point during negotiations had been what the partnership would mean for Reuters News, the international news agency, which supplies the Thomson Reuters Eikon terminal with headlines, stories and analysis, said the two sources, who spoke on condition of anonymity.
In its statement, Thomson Reuters and the Thomson Reuters Founders Share Co, which has overseen Reuters' editorial independence since the company was first publicly listed in the 1980s, have agreed to "consequential modifications" to the Trust Principles that guide the news reporting division.
The statement did not give any more details.
A source familiar with the matter said there would be no change in the commitment of Reuters News to "independence," "freedom from bias," and supplying "reliable news" in keeping with the trust principles.
