Thomson Reuters to Acquire FXall

In a press release earlier this week, Thomson Reuters Corporation (TRI - Snapshot Report) announced its decision to acquire 100% stake in FX Alliance Inc (FX) for $22 per share. It will fund the purchase in cash. No other details were disclosed except that the deal is expected to reach completion in the third quarter of this year.

Thomson Reuters will acquire FX Alliance’s electronic foreign exchange platform for approximately $625 million, according to Reuters. Barclays, a unit of Barclays PLC (BCS - Snapshot Report) and J.P. Morgan, a unit of JPMorgan Chase & Co. (JPM - Analyst Report), will monitor the proceedings for Thomson Reuters and FX Alliance, respectively.

Sources reveal that both the companies will merge their respective platforms and the total volume of trade recorded by the combined company will make it the largest electronic trading pool in foreign exchange.

FX Alliance’s largest shareholder, Technology Crossover Ventures, also lent its approval for the deal and suggested that the other shareholders do the same. The acquisition is slated to enable FX Alliance to cater to a wide range of people across the globe, substantially increasing its client-base. It will also have the opportunity for greater innovation.

The news came as a shock to most of the industry players, who believe it will be difficult to merge two completely different platforms on a common base. However, they are eager to witness the outcome of this venture.

The electronic foreign exchange trading solutions provider FX Alliance was established in 2000. It currently caters to over 1,000 institutional clients around the world and operates round the clock, 5-days a week.

FX Alliance currently retains a Zacks #1 Rank, which translates into a short-term Strong Buy rating. Thomson Reuters holds a short-term Zacks #3 Rank (Hold).