The merger of Thomson (NYSE: TOC) and Reuters (NSDQ: RTRSY) is on track, but for now, Thomson is a standalone entity, so the Thomson business dominated Robert Daleo’s presentation to the UBS Global Media & Communications Conference. After an extensive overview of the Thomson business, from both a financial and product perspective, Daleo touched on some of the key things to look for when the companies combine.
Synergies: “Truly one and one will be three.” In addition to the obvious synergy, cost cutting, the companies hope to produce product synergies, with the general idea that Thomson’s databases of information can add value to Reuters financial and news content. Example: the financial community will now be more directly exposed to Thomson’s WestLaw database, which may come in handy for evaluating the prospects of a merger closing. Or, if you’re following the development of drug, as an investor, you can access Thomson’s scientific information to learn more about the pipeline. In the beginning of the presentation, Daleo stated flat out. “bigger is better and the benefits of scale can never be underestimated.”
Platforms: Another point Daleo drove home, in terms of product, is that the Thomson business is about taking advantage of its core platforms, most notably WestLaw. The company has four rapidly-growing products that it’s built off of WestLaw, in such areas as legal services and financial information.
Regulatory: No new information on the regulatory situation, so by all accounts, the deal should close in late Q1 or early Q2.
Economy: The economy was obviously a major concern among questioners, who wanted to get a sense of how the company would handle a downturn if one were to occur. Obviously, the company won’t be immune to a dip — arguably, it’s quite vulnerable because of its exposure to financial services. But Daleo insisted that the company is diverse and that it and its customers have learned, since the last recession, how to better manage weakness. He noted that if law firms and financial institutions start paring back on staff, their per-seat costs will go up.
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