The European Commission says that the proposed £8.9 billion takeover of Reuters by Thomson raises "serious doubts" about fair competition in the financial information business.
The European Commission has decided to open an in-depth investigation under the EU Merger Regulation into the proposed combination of Thomson of Canada and Reuters of the UK.
In a statement, the Commission says its initial market investigation "indicates that the proposed merger would raise serious doubts as regards adverse effects on competition in several markets of the financial information sector".
In particular, the Commission is concerned about the provision of data-feeds, access to specific financial information databases, real-time and aftermarket research such as broker reports and the provision of news services. Most of these products are predominantly used in off-trading floor activities of financial institutions.
Brussels fears the merger may "have an impact on other providers of financial information which integrate the financial products concerned into their own offerings, as well as on financial institutions and final customers of such products".
The Commission now has 90 working days (until 25 February 2008) to take a final decision on the proposed transaction.
Separately, Thomson said that in the United States the Department of Justice had set a deadline of 15 January to hand down its ruling on whether the merger poses competition problems.
Commenting on the latest developments, Tom Glocer, currently CEO of Reuters and CEO designate of Thomson-Reuters says: "Today's developments bring clarity and transparency to the regulatory timetables on both sides of the Atlantic. Our discussions with both sets of regulators have been constructive and have developed in line with our expectations. Thomson and Reuters remain committed to working with them through to the end of their investigations. Customer feedback to the proposed transaction has been overwhelmingly positive, and we are hopeful that we can work with the regulators to expedite the process and complete the transaction in or around the first quarter of 2008."