A Reuters-Thomson deal could have fallout in Hub
Thomson Corp.'s potential $17.5 billion acquisition of Reuters Group PLC , the global financial and general news organization, could affect its 900 employees in Boston, media specialists said yesterday.
Thomson produces market analysis and other data for investors, businesses , and the media, and Reuters is itself one of the world's top media companies. If the two merged, they would be a formidable competitor for Bloomberg LP, currently the dominant player in financial news and information. Neither side would comment on the deal's potential impact on Boston citing the unfinished negotiations, but analysts say there's a push to get a deal done within weeks.
Thomson occupies an entire block on the South Boston waterfront with its own private way, Thomson Place . Though the company's headquarters is in Stamford, Conn., and it is controlled by a wealthy Canadian family, its Boston operation accounts for $1 billion in annual revenue, half the total for Thomson Financial , its second-largest unit.
How Thomson's local presence looks after the merger will largely depend on how it prioritizes the news gathering and financial analysis sides of its business and on where it has offices and employees that are redundant with those of Reuters, said Rick Edmonds , media business analyst at the Poynter Institute , a St. Petersburg, Fla. , media think tank.
"My understanding is there's a certain amount of overlap but they're also pretty distinctive," companies, Edmonds said. Thomson does little news gathering, he said, but is adept at electronically distributing the information to its clients. Reuters, meanwhile, is primarily known as a business and general news operation, with a staff of reporters working in offices around the world, particularly in cities with significant financial services sectors.
Despite that, there is significant overlap between the two companies that could lead to some cost cutting. Reuters draws less than 10 percent of its revenue from its news operation, a spokesman said, while the rest comes from providing data to the financial services industry.
A Thomson-Reuters combination would continue a trend of traditional media companies and technology firms consolidating and jockeying for position in a shrinking industry. News Corp. , which owns the Fox broadcast network and Fox News cable network, is bidding for Dow Jones & Co. , which owns The Wall St. Journal. Microsoft Corp. is reported to be eyeing Internet search firm Yahoo. Newspaper companies such as Tribune Co. and the former Knight Ridder Inc. also have changed hands recently.
London-based Reuters has a Boston office with eight reporters, who cover the region's companies and economy. That makes its presence here vastly smaller and dramatically different from Thomson's, whose staff works from several airy, renovated brick buildings on a narrow way off Congress Street .
Four Thomson Financial businesses have a presence there. Its corporate services division specializes in handling investor relations and webcasting for Fortune 500 companies. The investment-management division designs software that allows portfolio managers to analyze and track their investments.
Another unit, AutEX , focuses on so-called indications of interest, a marketing tool used by financial firms to inform one another of large stock trades. The fourth unit works on PORTIA , which is Thomson's record-keeping software for portfolio managers at large investment firms.
Boston is one of four cities -- New York , London, and Bangalore are the others -- from which Thomson manages those businesses. Thomson Financial accounted for 30 percent of all Thomson Corp.'s revenue last year.
Still, Thomson's Boston presence is significantly smaller than at its peak, when the company had 1,300 employees here. Its swanky offices, near the Boston Children's Museum and about a half-mile from the new Boston Convention and Exhibition Center , opened in 1993, more than a decade before the current South Boston waterfront building boom began. Prior to that , Thomson Place was known as Pittsburgh Street .
By 2001 , Thomson's presence there had started to diminish as the result of a cost-cutting initiative. Some employees were transferred to a new office in New York, while others were shed through attrition, said spokeswoman Sally Cates .
Keith Reed can be reached at reed@globe.com. 
