The takeover, pitched at 12.8 billion euros or 17.2 billion dollars, would elevate Thomson-Reuters above industry leader Bloomberg into first place and also hand Thomson ownership of Reuters' non-financial news and photo agency.

"The boards of Thomson and Reuters announce that they have today (Tuesday) agreed to combine the two groups," the pair revealed in a joint statement which said they would both recommend the transaction to shareholders.

The new company, to be called Thomson-Reuters, would be listed on the London and Toronto stock exchanges and headed by Reuters chief executive Tom Glocer. Thomson Corp. chairman David Thomson would keep his role.

Thomson's bid has won the crucial backing of the Reuters Founders Share Company which controls a "golden share" allowing it to block any takeover to defend the Reuters Trust Principles of editorial independence.