Thomson-Reuters deal would raise U.S. antitrust issue

By Peter Kaplan

WASHINGTON (Reuters) - Canadian publisher Thomson TOC.TO would face an arduous investigation by U.S. antitrust authorities if it makes a bid to acquire news and financial data provider ReutersRTR.L RTRSY.O, antitrust law experts said on Friday.

"It's going to be a really tough investigation," said one prominent antitrust lawyer who requested anonymity. "I'm not sure it's doable."

A combined Reuters and Thomson would reduce the number of major players in financial information, and give Toronto-based Thomson a lead in the market currently dominated by Reuters and privately owned Bloomberg.

However, such a deal could still win approval if an investigation showed that the market would remain competitive after the merger.

"If (the market) is defined narrowly, the market shares could be problematic. But there may be reasons why the market is not as narrow as one would think," said Robert Doyle, a partner in the firm Doyle, Barlow & Mazard.

"And given the past history of mergers getting through in highly concentrated markets, this case stands a good chance of passing antitrust muster," Doyle said.

Under U.S. antitrust law, authorities can sue to block any merger if their investigation concludes that it would substantially lessen competition.

Reuters faced close scrutiny in 2001 when it acquired some of the assets of Bridge Information Systems, a smaller competitor in the market for news and financial data. However, the deal was ultimately approved.