Why have Reuters and Dow received simultaneous offers? Approaches for two of the world’s top global financial information providers might look like a coincidence. But it probably isn’t.
This week has seen the US stock market hit record highs. We are also in the midst of an extraordinary mergers-and-acquisitions boom—witness Microsoft/Yahoo, ABN Amro and Altadis, just to mention a few of the big deals swirling this week that have nothing to do with financial media. Meanwhile, the global economy is strong.
One view is that this is all a bubble about to pop. And there are undeniably some cyclical elements—the extraordinary liquidity sloshing around financial markets, especially in connection with leveraged buyouts.
But, as with most booms, there is also something genuine going on. In this case, if one had to use one word, it would be globalization. The emergence of China, India and Russia has added a few notches to global growth. Meanwhile, despite all the protectionist backlashes, industries are consolidating across borders—especially in old Europe.
All this activity is incredibly positive for corporate financiers and hedge funds. But they are not just benefiting from global restructuring of the economy. In many ways, they are at the vanguard of globalization themselves. They are operating across national frontiers more than any other group—apart, perhaps from pop stars, fashionistas, movie idols and other members of the Hello magazine brigade.
So the world is globalizing. Finance is globalizing faster than other sectors. And Reuters and Dow Jones—that serve the global financial industry—are plays on that trend. No wonder Thomson and Rupert Murdoch are interested in them.
Dow Jones is a minority investor in Breakingviews. The WSJ also carries a daily breakingviews column.