Media giant Thomson is in talks to buy Reuters for about £8.8 billion to create the world's biggest news and financial data company, the two firms said today.
The two firms said Reuters shareholders would get 352-1/2 pence in cash and 0.1600 Thomson shares for each share, worth an equivalent of 697 pence a share based on yesterday's closing prices.
That would be 42 per cent above Reuters closing share price on Thursday, the day before it announced a bid approach.
The enlarged, dual-listed group will be called Thomson-Reuters, and the combined Thomson Financial unit and Reuters financial and media businesses will be called Reuters.
The combined group will also adopt the Reuters trust principles aimed at safeguarding the independence of Reuters news, the joint statement said.
The Reuters trustees have a "golden share" capable of blocking a takeover of the company.
Woodbridge, the Thomson family holding company that will own about 53 per cent of the combined company, will vote in favour of the deal, the joint statement said. Other Thomson shareholders will own 23 per cent of the combined business and Reuters shareholders will own 24 per cent.
The deal is subject to approval by both Thomson and Reuters shareholders.