Blackstone buys 55% stake in Thomson – Reuters’ Financial and Risk Division

Blackstone Group has struck a deal with Thomson Reuters in a bid to buy a 55% stake in the Financial and Risk division of the company. The deal is aimed at breaking the strong grip of Bloomberg in providing Financial Data to the companies.

The deal succeeds Thomson Reuter’s acquisition of Symphony, a messaging platform, in an effort to break grip of Bloomberg on chat messaging between financial circles.

According to a statement released by TR, “The F&R business provides a broad and robust range of offerings to financial markets professionals, with $6.1 billion in revenues in 2016.” The said acquisition will put Blackrock in direct competition of Bloomberg Terminal, a company ran by ex-New York Mayor, Mr. Mike Bloomberg.

Bloomberg’s grip on the sector grew in 2016 with a market share of 33.4 per cent versus 23.1 per cent for Thomson Reuters, according to consultancy Burton-Taylor.

The said buyout does not include any of the Reuters’ news providing operations which are separate from the Reuters Data company. Financial & Risk Division at Reuters specializes in “global content sets, including fundamentals, estimates and primary and secondary research alongside tools, platforms, venues and services to enable fast, intelligent decision-making and trading.”

According to preliminary details, “Black stone has agreed to pay Reuters News a minimum of $325 million per year for 30 years as part of the deal.”

The Financial & Risk Division at Reuters ran at an operating loss of about $381 million in 2016, as per the Thomson Reuters’ Annual Report.

Blackstone has agreed to pay Reuters News a minimum of $325m per year for 30 years as part of the deal. The division ran at an operating loss of about $381m in 2016, according to Thomson Reuters’ annual report*.

Despite the investment from Blackrock, the company release mentioned, “Thomson Reuters would retain a significant interest in the F&R business and would retain full ownership of its Legal, Tax & Accounting and Reuters News businesses”

Sales of financial terminals have been competing hard to win the declining customer base for the terminals, as analysts wane away.