Blow to Blackstone as Merrill Lynch dumps Thomson Reuters

Factset will later this year begin replacing Thomson Reuters as the primary market data provider for Merrill Lynch Wealth Management’s 15,000 advisers with its web-based platform, according to a statement on Monday.

“It’s a significant deal for the company,” Philip Snow, chief executive of Factset, told the Financial Times. “Wealth management is a relatively new area for Factset, but it’s an area we’re focused on and excited about.”

Bank of America, which owns Merrill Lynch, began evaluating rival information providers for its wealth management unit months before the deal to spin off Thomson Reuters’ data and terminals business to Blackstone was signed in January, according to people familiar with the matter. Nonetheless, the replacement of Thomson Reuters with Factset at Merrill Lynch Wealth Management, dubbed “the thundering herd”, is a blow to Stephen Schwarzman’s Blackstone, the FT said.

Blackstone is buying a controlling 55 per cent stake in F&R and rebranding it Refinitive. The transaction is expected to close before the end of this year.

The FT said Blackstone is betting it can reinvigorate the company and take on Bloomberg.

Bloomberg enjoys a 33.2 per cent market share in the $28 billion global data business, with Thomson Reuters at 22.5 per cent and Factset 4.5 per cent, according to Burton-Taylor International Consulting. But Factset is growing at a faster rate than its bigger rivals.

The ability of Blackstone, one of Wall Street’s most powerful companies, to leverage its relationships with banks and brokerages into subscribing for more terminals was seen by many analysts as an important factor behind the Thomson Reuters deal. “Merrill Lynch opting for Factset casts doubt over that," the FT said.

“However, a person close to the talks between Blackstone and Merrill Lynch argued that the timing meant ‘it’s not one where [Blackstone] would have been able to exert significant influence’.

“It’s not worth trying to strong-arm people,” the person added. “Trying to reverse a decision that pre-dates signing, that’s not the thesis of the deal. That’s a tough way to make a living.”

Thomson Reuters said in a statement that it served more than 180,000 wealth professionals in more than 2,000 companies globally, and was “laser-focused on creating powerful data and insight into new areas of interest”. ■