Thomson Reuters Corp. (NYSE:TRI) has confirmed reports that it is in advanced talks to sell a stake in its financial and risk business to US private equity firm Blackstone Group LP.
Earlier, Bloomberg reported that Blackstone was considering buying a 55% holding in the business, which provides data, analytics and trading platforms to Wall Street and financial professionals around the world.
Reuters to retain significant holding in division
The division has a valuation of about US$20bn, sources told the financial news website.
Reuters did not disclose the size of the stake in the unit that it might sell to Blackstone but said it would retain a significant holding.
“As part of any proposed partnership, Thomson Reuters would retain a significant interest in the F&R business and would retain full ownership of its legal, tax & accounting and Reuters News businesses,” Thomson Reuters said in a statement.
The financial and risk unit made US$6.1bn in revenue in 2016, accounting for more than half of the group's total US$11.2bn.
Division includes Eikon
However, the division has failed to grow revenues over the years as banks lower spending in restructuring efforts following the financial crisis. The spending curb by banks has also been prompted by the uncertainty caused by regulation, including new rules in Europe known as the Market in Financial Instruments Directive (Mifid II).
A disposal of the financial and risk business would mark the biggest restructuring of Reuters since Canada’s Thomson took over the company in 2008.
The unit includes flagship terminal Eikon, which provides data, analytics and trading platforms to the finance industry.
The division also sells regulatory and risk management services to customers.