Blackstone Group LP's acquisition of a majority stake in Thomson Reuters Corp.'s financial and risk business is "on track" to close in the second half of the year.
In January, the companies announced that a group of investors led by Blackstone agreed to acquire more than half of Thomson Reuters' financial and risk business for about $17 billion. Under the partnership agreement, Thomson Reuters will maintain a 45% stake in the new corporation, which is valued at $20 billion.
The target deadline to secure EU approvals was set for the end of July, and the transaction could close sooner if it is swiftly granted regulatory approval. However, regulatory hurdles may push the deal's close to the end of September, sources recently told Reuters.
Speaking on a call to discuss first-quarter earnings, Thomson Reuters President and CEO Jim Smith said the two companies are making "good progress" in closing the deal from regulatory, operational and financial standpoints.
"We are on track, and we do not anticipate any surprises," Smith said, noting that Thomson Reuters continues to expect the deal to close in the second half of the year. Although management did not provide details regarding the size and timing of the tender offer, Smith said the company expects to launch the offer "shortly after the closing."
Smith, who was hospitalized in February, has returned to his post. The executive outlined Thomson Reuters' planned allocation of its $17 billion in proceeds from the transaction.
Management currently expects between $9 billion and $10 billion to be returned to shareholders through the tender offer, which Smith said is a narrowing of the previous range. The company anticipates using $3 billion to $4 billion to pay down its debt, and devoting $1.5 billion to $2.5 billion to cash taxes, fees and costs related to the transaction.
Additionally, management expects to create an investment fund of $1 billion to $3 billion to "facilitate strategic targeted acquisitions to bolster our positions in key growth segments of our legal and tax businesses," Smith said.