By Andy McCue, 22 October 2004 15:00
NEWS Reuters is to pay $110m to buy out Equant's 49 per cent stake in their joint extranet venture, in a move that will see the financial information service switch to BT for network services.
Reuters has said it intends to buy out Equant's 49 per cent stake in the Radianz venture and sell it on to BT. Reuters will continue to hold its 51 per cent stake in Radianz.
The purchase of Equant's stake is expected to complete by the end of the year subject to regulatory approval, with the sale to BT to follow in the first quarter of 2005.
The move is part of Reuters' Fast Forward transformation plans outlined in 2003, which aims to rationalise systems and put in place a coherent and unifying network to help lower operating costs and improve customer service.
Tom Glocer, CEO of Reuters, said in a statement: "This is a significant next step in the Fast Forward transformation programme at Reuters. Radianz has established itself as a first class global financial extranet supplier for Reuters and thousands of other demanding customers in the financial services industry."
Richard Holway of analyst firm Ovum Holway estimates the deal to be worth in excess of £400m a year to BT and key to the telco's attempts to turn itself into a global services player.
"BT gets a real fillip in network services area that both plays to BT's strengths and is a significant growth opportunity for the future - particularly on a global scene. And this is really new business for BT," he said.
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