SINGAPORE: Group LP catapulted itself into the major leagues of Wall Street’s financial information industry on Tuesday with the acquisition of a majority stake in the Financial and Risk business of Thomson Reuters Corp. The US$20 billion deal is Blackstone’s biggest bet since the financial crisis and pits co-founder Stephen Schwarzman against fellow billionaire and former New York Mayor Michael Bloomberg. Bloomberg’s eponymous terminals are the market leader in providing traders, bankers and investors with news, data and analytics. Blackstone will acquire a 55 percent stake in a newly hived off F&R business, a statement from both companies said. Thomson Reuters will retain a 45 percent holding and will receive approximately US$17 billion, including about US$3 billion in cash and US$14 billion of debt and preferred equity issued by the new business, the companies said. The Canada Pension Plan Investment Board and Singapore’s GIC will invest alongside Blackstone. The amount they will provide was not revealed. The Canada Pension Plan Investment Board declined to comment. A spokeswoman for GIC declined to comment.
Talks on a possible deal began in earnest last summer, two sources familiar with the negotiations said. Blackstone’s status as one of the world’s biggest investors, with business relationships with most of the major banks on Wall Street, was appealing as Thomson Reuters looked to boost sales of its flagship desktop product Eikon. Thomson Reuters Chief Executive Jim Smith told an investor call that there was room for more cost cuts in the new F&R business. The partnership will be managed by a 10-person board composed of five representatives from Blackstone and four from Thomson Reuters. The President and CEO of the new partnership will serve as a non-voting member of the board following the closing of the transaction. The companies did not say who that person would be.
