Blackstone buys 55% stake in Reuters unit

LONDON/NEW YORK: US private equity firm Blackstone Group LP catapulted itself into the big leagues of Wall Street’s financial information industry on Tuesday with the acquisition of a majority stake in the Financial and Risk (F&R) business of Thomson Reuters Corp.

The deal, announced by the firms in a statement, is Blackstone’s biggest bet since the financial crisis. Co-founder Stephen Schwarzman will go head to head against fellow billionaire and former New York mayor Michael Bloomberg, whose eponymous terminals are the market leader in providing traders, bankers and investors with news, data and analytics.

Under the acquisition, Blackstone acquire a 55% stake in a newly-hived off F&R business, the statement said. Thomson Reuters will retain a 45% holding and will receive approximately $17 billion, including about $3 billion in cash and $14 billion of debt and preferred equity issued by the new business, the companies said. The Canada Pension Plan Investment Board and Singapore’s GIC will invest alongside Blackstone but the statement did not specify the size of their stakes. The Canada Pension Plan Investment Board declined to comment. GIC could not immediately be reached for comment.

The new partnership will be managed by a 10-person board composed of five representatives from Blackstone and four from Thomson Reuters. The president and CEO of the new partnership will serve as a non-voting member of the board following the closing of the transaction. The firms did not say who that person would be.

Talks to sell Blackstone a stake in the F&R business first began in the summer, two sources familiar with the negotiations said.