Peter Warwick, CEO of the Thomson Reuters legal group based in Eagan, said in an interview that last week's $16.5 billion merger of Thomson Corp. and Reuters Group PLC should be good for the Minnesota business.
"We can use the Reuters corporate and financial databases to improve Westlaw," said Warwick, referring to the company's vast electronic legal database. "We can leverage the news and current events directly into our products. Reuters also has a [distribution network] for us to develop, particularly in [India, Malaysia, Singapore and Australia] that we couldn't have done without Reuters."
Yet Wall Street is wary of post-merger integration problems that could mean market-share gains for rival Bloomberg, which has about 34 percent of the financial news and information business to 33 percent for the combined Thomson Reuters.
There also is concern that the demand for market-related information will slacken during the deepening crisis for U.S. financial services firms that have lost billions and cut workers thanks to troubled investments in the mortgage industry and otherwise in a job-cutting economic environment.
Peter Appert, analyst with Goldman Sachs, told Marketwatch that he likes the Thomson Reuters combination from a strategic, long-term point of view, as the company develops its pay-for-information model sold to professionals and the financial media instead of the advertising-based model that has waned for newspapers and other general-interest publications.
But for now, it's wait and see.
"Ultimately, we have to deliver the customer satisfaction and the numbers," said Tom Glocer, the Reuters veteran who was named CEO of the merged company. "Bottom line, these are hugely complementary businesses." He said he expects the deal to deliver $500 million in cost savings within three years.
"We're in what we call the 'intelligent information' business," he said. "And the professionals will pay for it if you deliver the right content right into the heart of their work."
Basically, this deal will work if Reuters can generate more business through integrating with Thomson in North America, where it lags Bloomberg, and if Thomson can sell more products to lawyers, accountants, scientists, doctors and investors in Europe and Asia.
Thomson Reuters will provide financial expectations for this year in early May.
Most of the Reuters businesses will fit into the new "Markets Division."
The Eagan operations are the largest of the new company's "professional divisions'' and include the former West Publishing businesses. The Eagan campus will open an additional, $50 million data center in May.
Eagan now boasts the electronic brains behind the online activities for a number of Thomson businesses based in North America. More than 1,500 software experts and other computer jockeys have helped swell employment in Minnesota to 7,000, from 4,000 a decade ago. The company expects to add 200 jobs this year.
For now, Thomson Reuters officials aren't making specific predictions about further expansion until they see how the partnership plays out in the North American marketplace, where Bloomberg is king of financial information.
The newly combined Thomson Reuters will compete with Bloomberg as well as News Corp. and its newly acquired Dow Jones, MarketWatch and Wall Street Journal.
Thomson, through its Lipper, First Call and Thomson One, is a popular source for detailed information about stocks, earnings, other corporate information and mutual funds. Bloomberg is considered stronger on the fixed-income side and sells credit-services data used for mortgage-backed securities and other bonds.
Neal St. Anthony • 612-673-7144 • email@example.com