Thomson Reuters announced today that it is in the midst of talks with Blackstone Group LP, regarding the sale of a substantial portion of the company’s financial and risk business. The F&R unit reported $6.1 billion in revenues in 2016 alone. According to Bloomberg, the division is estimated to hold a value of roughly $20 billion.
As it stands, negotiations are underway, with Reuters’ board expected to meet on Tuesday to further discuss Blackstone’s cash offer. If the current conditions are agreed upon by both sides, Blackstone would assume a majority stake in the division, while Reuters would retain the unsold portion, as well as full ownership of its legal, tax and accounting and Reuters News businesses.
Thomson Reuters’ F&R unit provides banks and financial institutions and firms with updated news, data, analytics and tools. The division is a substantial contributor to the overall operational capacity of Reuters, and is responsible for more than half of the company’s revenues. Furthermore, the unit provides regulatory and compliance solutions to assist clients in their respective risk management practices.
Thomson Reuters’ announcement was carefully phrased, so as not to insinuate that the talks have been finalized in any way: “The discussions between Thomson Reuters and Blackstone may or may not lead to a definitive agreement. Thomson Reuters does not expect to comment further on market speculation or disclose any further developments unless and until it determines that further disclosure is appropriate or required.”
Blackstone has been active in its attempts to acquire business units that have shown promise or alternatively have a strong track record of success. Last year, the US-based private equity firm placed a bid to purchase Paysafe for $3.71 billion. The company provided an explanation for the bid, due to global customers’ move away from cash toward mobile payments and wallets.