Tom Glocer, the chief executive of Reuters, is to receive a £27 million windfall after the media group’s £8.7 billion takeover by its rival Thomson, it emerged yesterday.

Mr Glocer, who is to become head of Thomson-Reuters, a global media giant worth $35 billion (£17.6 billion), once the acquisition is completed, is entitled to a discretionary share option worth £25 million and a further £2 million from a long-term incentive programme under his new contract.

The windfall was revealed as Thomson and Reuters announced that Thomson’s half-cash, half-shares purchase of Reuters had received approval from Reuters trustees. Although the approval marks a big stepping stone for the deal, it is still subject to regulators and could break down if watchdogs in Europe and America rule that it is anticompetitive.

Based on 2006 market share, Thomson-Reuters would have 30.23 per cent of the financial data market in the United States, 37.65 per cent in Europe and 34.93 per cent in Asia. The new entity would still be behind Bloomberg in market share in America and Asia, but would overtake it as No 1 in Europe The Reuters brand would survive after the merger, as the name for the combined media businesses of the two groups. Thomson’s professional businesses, which include legal, tax and accounting, scientific and healthcare, would be known as Thomson-Reuters Professional. The company would be listed on stock exchanges in Canada, the UK and the US.

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

Devin Wenig, chief operating officer of Reuters, would become chief executive of the new Reuters division and Jim Smith, the chief operating officer of Thomson, would head Thomson-Reuters Professional. The new board would be split equally between Thomson and Reuters represetatives.

Richard Harrington, 60, the president and chief executive of Thomson, who orchestrated the group’s transition from traditional publishing to an electronic business solutions service, would retire once the deal is completed.

Reuters said yesterday that the trustees were satisfied that Woodbridge, the Thomson family holding company that owns a 70 per cent share in Thomson, would adhere to the principles of the Reuters Founders Share Company. Thomson’s purchase of Reuters gives Woodbridge a 53 per cent stake in Thomson-Reuters.

Pehr Gyllenhammar, the chairman of the trustees, said: “The trustees are pleased to give their support to the proposed business combination of Thomson and Reuters. We believe that the formation of Thomson-Reuters marks a watershed in the global information business and will underpin the strength, integrity and sustainability of Reuters.”

However, the deal drew criticism from unions, which fear that the £500 million in costs that Thomson plans to cut in the first three years after the merger will result in job losses. The acquisition is still subject to shareholder approval and the reaction of employees and customers.

The US Justice Department said yesterday that it would investigate potential competition implications of the deal.

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