Dear colleague,
This is the most important letter I have ever written as chief executive of Reuters, which I have been proud to lead since 2001. Today is a turning point in the 156-year history of our company. We have agreed with The Thomson Corporation to combine our two businesses to create a unique and dynamic global information company; one that will deliver trusted information, software solutions and transaction services to professionals across many industries and all nations. This is the new Thomson-Reuters.
At the outset, let me emphasize that this agreement will preserve all that is Reuters – a commitment to truth, accuracy, independence and freedom from bias. This has been guaranteed by having Thomson-Reuters and its majority shareholder contract to uphold the Reuters Trust Principles – principles that will be adopted by the combined companies in full.
The transaction will mean the existing Reuters business and the current Thomson Financial will come together to form a new unit called Reuters that will be headed by Devin Wenig as CEO. I will proudly serve as CEO of the entire group, Thomson-Reuters, and of course David Schlesinger will continue as Editor-in-Chief. Thomson’s other existing businesses, in legal, tax & accounting, healthcare and science will be renamed Thomson-Reuters Professional and will be headed by Jim Smith of Thomson as CEO. Stephen Dando will head up HR for the Group as Chief Human Resources Officer.
I believe there is a natural fit between Reuters and Thomson, in particular across geography and products. Thomson is more active in the US, while Reuters excels in Europe and Asia. Reuters is strong in real-time data and news, while Thomson Financial excels in historical and reference data. In terms of financial trading systems, which have been a key part of Core Plus, Reuters has great strength in FX, while Thomson’s TradeWeb service leads the industry in Fixed Income.
Many of you will be familiar with Thomson Financial. You might not be as familiar with Thomson’s leading businesses that create and distribute content to the legal, tax & accounting, healthcare and scientific communities. By combining these strong businesses together with Reuters we will start to deliver a broader and stronger service for customers around the world. Just imagine what our Core Plus initiative in high-value primary research can do with Thomson’s extensive healthcare data.
A key benefit to all employees will be the financial strength of the combined Group and the diversification of markets. This should allow us to make long-term investments in areas like Editorial with reduced exposure to cyclical financial services markets.
As you will have read, we have forecast that the combined group will realize at least $500 million in synergies by the end of the third year following the completion of the deal. This may scare some of you. But put this in context; it is less than one-third of the savings realized from our company alone through Fast Forward and preceding transformation program. Much will be written in the media about job cuts and there will be some. But far greater value will come from what we can do together. I must stress at this stage that detailed plans about where we will reduce costs are still to be worked out. What I can say is that we will preserve the best of both companies.
Today is just the beginning. There will now be a period in which competition authorities will examine our plans for the combined group. We will need their approval and that of our shareholders before we complete the transaction and begin the integration. Until this is achieved we must remain and act as two separate companies, just as we have done up to this point.
Later today I will brief Reuters managers about the transaction alongside Niall FitzGerald, our Chairman, and Richard Harrington and Geoff Beattie, CEO and Deputy Chairman, respectively, of Thomson. Following that briefing, your managers will arrange to meet with you and provide more detail on this announcement. In the meantime, you can a video in which I lay out the thinking behind the deal.
For the time being it remains business as usual and our first task as always is to continue to serve our customers. If any of you have any pressing questions please, catch me in the corridor – as you often do – or send me an email. I’ll do my best to answer them.
Over the years, we have all worked very hard at Reuters to rebuild the company through the Fast Forward program and then return to growth under Core Plus. The proposed combination with Thomson signals a new stage in this journey, delivering great value for our shareholders and great potential for our customers and employees. Reuters has always been a great place to work. I will make sure that Thomson-Reuters only strengthens this.
Tom