Thomson Financial Wins Deal With Merrill, Hurting Reuters
Wed Nov 13, 1:38 AM ET
LONDON -- In a blow to Reuters Group PLC's restructuring strategy, Merrill Lynch & Co. said it had chosen Thomson Financial to supply 27,000 terminals to its world-wide retail brokerage network, Wednesday's Wall Street Journal reported.
The much-sought-after five-year deal, which people familiar with the matter said would be worth about $1 billion to Thomson Financial, will replace Merrill's in-house financial-data system for retail brokers with a system designed and operated by Thomson Financial. The contract isn't signed, but Merrill said it expects to complete the deal in the next several weeks. The bidding process had lasted over a year.
Reuters Chief Executive Tom Glocer said Monday that the company wasn't prepared to lower its price to "buy business," adding, "We have worked very hard to improve our margins in 2002, and even for a valued client like Merrill Lynch we will not compromise this progress."
Thomson Financial Chief Operating Officer Sharon Rowlands said her company won the Merrill contract based on Thomson Financial's technology, not by offering Merrill a cut-rate deal. The president of Merrill's U.S. private-client group, James Gorman, said the decision was based on a variety of factors, including Thomson Financial's ability to work with other suppliers in providing the new system and its ability to train Merrill employees to get the most out of the system.
People familiar with Merrill's position said Merrill decided Monday to go with Thomson Financial, a unit of Canada's Thomson Corp. , and notified Reuters of that decision. Privately held Bloomberg LP also had bid for the contract, but Merrill notified it some time ago that it was unlikely to be chosen, these people said, adding that no companies withdrew from the bidding process. Reuters, however, maintains that it did withdraw from the process.
The loss of the Merrill deal marks a setback for Mr. Glocer, brought in a year ago, who has sought to regain momentum for Reuters through midtier products priced below the company's top-of-the-range trading system.
Wall Street Journal Staff Reporters Charles Goldsmith and Kay Larsen contributed to this report. |
