Tuesday, 22nd May 2007
If it's not European banks then it's international financial information companies. Since January 2007, $2 trillion worth of merger deals have been announced, 46% of which were cross-border. Boyant stock and international markets and low interest rates have fuelled the urge to merge. Even the information world has been targetted:
Reuters & Thomson
Thomson's £8.8 billion bid for Reuters, to form Thomson-Reuters, a news and financial data business to rival Bloomberg, may now face regulatory and integration challenges. The merger, which would give the two main players within the business information sector (Thomson-Reuters and Bloomberg) a 34% and 33% share of market share respectively (source: Merrill Lynch), are likely to face scrutiny from competition regulators as well as from investors concerned about integration clashes. The Thomson family announced that they would take direct control of the merged group adding to confusion regarding management and operational implementation.
Dow Jones & News Corp
In early May, the Bancroft family, majority shareholders of Dow Jones, rejected a £2.5 billion offer from News Corp for a 65% shareholding. It would appear that Rupert Murdoch, the CEO of News Corp, has his acquiring eyes primarily focused on The Wall Street Journal, as he's keen to expand his empire within the 'up-market publications sector'. But what of plans for Dow Jones' other products like Factiva? Will News Corp strike again?
Mircrosoft & Yahoo!
Was there ever likely to be a merger of these two internet giants or was it all just rumour? Apparently any talks between Microsoft and Yahoo! reported in the press are "not current". The merger, intended to form a partnership that could finally challenge Googles top position, could have potentially benefitted both parties: Microsoft from Yahoo!s online display advertising know-how and networks and Yahoo! from Microsoft's distribution outlets. But was the Microsoft/Yahoo combination ever a real threat? Perhaps one day a Google rival will ride into town and stay for the fight.
Datamonitor & Informa
The £513 million cash bid made by Informa for Datamonitor adds yet another merger mix to the business information market. Is Tesco-fication taking hold within the industry? 'High-street' players beware.
But what, if any, impact would these mergers have on information professionals and data end-users? According to the FT, at the core of all these mergers is the "conviction that more and more people will pay up for accurate and timely financial news and data". Does that mean fees are likely to go up? Or would fees come down due to integration cost cutting? Would products be cut or merged or further developed, using the skills and strengths from US and European market expertise? Is the choice for real time and historical financial data really going to be down to two providers?
With the ever increasing supply of free online sources, like BusinessWeek's new company information source, and the introduction of financial products focusing on 'new' markets, like leveraged finance and hedge funds, the current dominant business information brands, like Thomson, Reuters, Bloomberg and the FT, may be wise to fully evaluate end-users needs and the new product landscape before making any rash decisions.
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