Banks and financial firms that buy information from Thomson and Reuters are questioning Thomson’s £8.5 billion takeover of Reuters on the ground that it would restrict choice and significantly reduce competition.

Angela Knight, the chief executive of the British Bankers’ Association, said: “As with any service where one starts to reduce the numbers of players, there will be questions about what that means in terms of choice and in terms of cost-effectiveness for the users concerned.”

Her intervention over the proposed deal – which could be formally agreed as early as this week – followed an attack from another customer body, the Information Providers Users Group. Colin Wright, its staff consultant, said that its members – which include Investec and JPMorgan – said that competition kept providers “lean and mean”. He said that the group had not ruled out an approach to the competition authorities.

The growing concerns of customers about a tie-up of the No 2 and No 3 financial information providers are expected to increase the chances of tough scrutiny of the deal by regulators in Brussels and in the United States.

BACKGROUND

• Hedge fund takes stake in Reuters

• Reuters chief to receive £27m after takeover

• Thomson and Reuters agree £8.7bn takeover

• Thomson cashes in on learning division

• Bid likely to cap Reuters at £8.8bn

Has Reuters chosen the right way?

The deal with Thomson marks a shift away from Reuters' roots in journalism and into a future of financial analytics

Related Internet Links

• Reuters company information

• Reuters share price chart

• Reuters forecast

Analysts have highlighted “considerable deal risk” from regulatory scrutiny. Some believe that completion of any get-together could be delayed into next year or that the deal could be blocked altogether.

Reuters and Thomson confirmed in a joint statement this month that they were in talks about a cash-and-shares tie-up. They said that the enlarged group would lead to annual savings of £250 million after three years. It would have a similar market share to Bloomberg at about 34 per cent.

Some customers had hoped that Thomson could have created a bigger third force in the market by buying up smaller specialist firms instead.

Reuters and Thomson are understood to feel confident that the Reuters Founders Share Company – the 18-member body that has the right to block a takeover if it believes that the integrity of the company’s news reporting is under threat – will approve the deal.

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