Reuters, Thomson Corp. Agree To Merge

Reuters Group PLC have agreed on terms for a merger on Tuesday to a $17.2 billion takeover by Thomson Corp. that would vault the combined entity ahead of Bloomberg to become the world's largest financial data and news provider.

Woodbridge, the Thomson family holding company which controls approximately 70% of Thomson, has irrevocably committed to vote in favour of the Transaction and the Reuters Founders Share Company, which controls a special share in Reuters, has resolved to support the Transaction.

Niall FitzGerald, Chairman of Reuters, said "This is an historic day for Reuters and represents an important chapter in the development of our company and the commitment to our heritage. The shared expertise and complementary strengths of these two companies makes for a strategically compelling and financially attractive combination. I am especially proud that Reuters journalism will continue to be governed by the powerful Reuter Trust Principles of independence, integrity and freedom from bias."

The boards of Thomson and Reuters believe there is a natural fit and compelling logic in creating a global leader in electronic information services, trading systems and news:

• Customers will benefit from seamless access to richer content and broader capabilities across financial and professional markets from a trusted provider
• The Combined Business will be positioned to benefit from the continuing shift towards electronic delivery of information to professional and financial customers
• Complementary geographic and product markets Diversified revenue streams and a larger capital base will provide a stable platform from which to invest and grow
• Thomson and Reuters brands will be maintained in their key areas of strength
• Synergies at an annual run-rate of in excess of US$500 million expected by the end of the third year after closing • Complementary management culture and values
• Dual listed company structure will allow the Combined Business to have listings in Canada, the UK and the US and will enable both sets of shareholders to participate in further value creation
• The Combined Business will adopt the Reuter Trust Principles The combination will be effected through a dual listed company structure.

To effect the Transaction, Reuters will be acquired by a newly formed UK holding company, Thomson-Reuters PLC, through a scheme of arrangement in which each Reuters Share will be entitled to 352.5 pence per share in cash and 0.16 Thomson-Reuters PLC shares. Each Thomson-Reuters PLC Share will be equivalent to one Thomson-Reuters Corporation Share. Based on the closing Thomson share price of C$48.46 on the Toronto Stock Exchange on Thursday 3 May 2007, the day before the initial announcement by Reuters (and at an exchange rate of £1: C$2.19795), this would value each Reuters share at approximately 705 pence representing a premium of approximately 43% to the closing share price of Reuters on Thursday 3 May 2007. Based on the closing Thomson share price of C$46.36 and exchange rate of £1: C$2.19360 on 14 May 2007, the day before this announcement, this would value each Reuters Share at approximately 691 pence and values the entire existing issued share capital of Reuters at approximately £8.7 billion. The cash consideration for the Transaction will be funded by Thomson. Based on current issued share capital, 201,095,235 shares in Thomson-Reuters PLC will be issued to Reuters Shareholders in the Transaction on completion. On that basis, Woodbridge will own approximately 53% of the Combined Business, other Thomson Shareholders approximately 23% and Reuters Shareholders approximately 24%.

The Combined Business will adopt the Reuter Trust Principles and Reuters Founders Share Company structure. Woodbridge has agreed that it will use its voting control to support the Reuter Trust Principles.

Thomson President and CEO, Richard J. Harrington, said "This combination marks a strategic milestone for both companies. For Thomson, it is a defining moment in our journey to become the information provider of choice for the world's business and professional markets. Thomson has a long history of creating value for all its stakeholders and this Transaction builds on that tradition."

Tom Glocer, CEO of Reuters, said "I am looking forward to the opportunity of being the first CEO of Thomson-Reuters. The combination of these two great businesses will create an exceptional global information company guided by the Reuter Trust Principles. It will provide a broader offering to our customers, deliver value to our shareholders and create great opportunities for our people."

Source: Thomson