U.S. Approves Merger of Two Legal Publishers

The Justice Department and seven states on Wednesday approved the $3.4-billion merger of two of North America’s largest legal publishers after the companies agreed to sell more than 50 publications worth more than $275 million.

Thomson Corp. and West Publishing Co. reached the agreement with the Justice Department’s antitrust division and the attorneys general of California, Connecticut, Illinois, Massachusetts, New York, Washington and Wisconsin. It was the largest number of states ever to join the federal government in an antitrust enforcement action.

Under the agreement, a lawsuit to block the deal and a proposed consent decree to settle the suit were filed simultaneously in U.S. District Court in Washington.

Without the divestitures and several other measures in the agreement, the lawsuit said, the merged company would have reduced competition in dozens of markets nationwide where Thomson and West are the only publishers. It said the deal would also have reduced competition for online legal research services.

“This settlement is a victory for all of us. We are all consumers of legal advice from time to time, and as citizens we rely on access to information about our nation’s laws,” said Assistant U.S. Atty. Gen. Anne K. Bingaman, head of the antitrust division. “Competition in the legal publishing industry helps keep costs low, improves product quality and increases innovation.”

Toronto-based Thomson owns several U.S. legal publishing companies, including Lawyers Cooperative Publishing Co., Bancroft-Whitney Co. and Clark Boardman Callaghan. Thomson reported legal publishing sales of $368 million in this country last year.

West, based in Eagan, Minn., is the largest publisher of enhanced primary law materials and related research tools in the United States. It had estimated legal publishing sales of $700 million last year, the Justice Department said.

The suit said the original deal would have lessened competition in nine markets for publications of statutes and court decisions with commentary and in more than 50 markets for treaties and legal guides.

If approved by the court, the settlement will require Thomson to:

* sell more than 50 publications valued at between $275 million and $300 million and representing $72 million in annual sales. They include U.S. Code Service; U.S. Reports, Lawyer’s Edition; Deering’s Annotated California Code; New York Consolidated Laws Service; and Auto-Cite, which is used in online services.

* license to other law publishers the right to use the pagination of individual pages in West’s National Reporter System.

* grant to Lexis-Nexis options to extend for five years its current licenses for three nonlegal databases: Investext, ASAP and Predicasts.

* give options to California, Washington and Wisconsin to reopen the bidding for contracts previously held by Thomson for publication of their official state case law reports.