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REUTERS BUYS APPLICATION NETWORKS TO ACCELERATE GROWTH IN ITS RISK MANAGEMENT BUSINESS

London – Reuters (LSE: RTR; NASDAQ: RTRSY) today announced it has acquired Application Networks, a leading risk management software provider based in London and Palo Alto, for $41million in cash to accelerate the growth of Reuters Trade and Risk Management. The acquisition is consistent with Reuters Core Plus strategy of extending its range of enterprise-wide capabilities to meet the rising demand for pre and post trade services.

Reuters Trade and Risk Management practice generated revenues of £82 million in 2005 and is part of Reuters Enterprise division. It provides traders, heads of desk and risk and operations managers with a suite of trade and risk management software solutions to address core risk issues.

The sharp increase in volume trading of complex financial instruments, and the growing dependence of banks on trading for profits, means banks and hedge funds are increasingly reliant on the latest real-time risk systems and technology to keep ahead of the market.

Application Networks provides the cross-asset derivatives trading platform, JRisk, which is already in use at leading banks such as, JPMorgan Chase, Societe Generale, UBS and Wachovia. It recently signed a distribution agreement with GlobeOp – a leading provider of packaged services to hedge funds.

Application Networks brings significant expertise to Reuters in a growing market where management of risk is the key differentiator for top performing global banks. The combination of the robust functionality of Reuters Kondor+ and the JRisk advanced technology platform will enable Reuters to meet the needs of customers looking for fast, flexible, integrated systems that cover all asset classes.

With this acquisition Reuters aims to become a clear market leader inside two years in the £1.5 billion global market for trade and risk management systems.

Peter Moss, Global Head of Reuters Enterprise Solutions, said: “We are committed to growing Reuters Trade and Risk Management as a key product offering and this acquisition shows our determination to do this. Managing the trade process and associated risk is increasingly crucial to our clients and we aim to offer them an outstanding product backed by Reuters global support network.”

Andrew White, Reuters Global Head of Trade and Risk Management, said: “Reuters is accelerating the delivery of an advanced product to new and existing customers. Backed by the global resources of Reuters, we believe it will become the leading choice for innovative banks and hedge funds.”

Reuters and Application Networks clients will be given the opportunity to migrate to a new platform within the next 24 months. This will be called Kondor+ 4.0 and will combine JRisk’s easily upgradeable “services orientated architecture” with the proven functionality of Kondor+. Before then Reuters will release staged upgrades to existing JRisk and Kondor+ users as the platforms converge.

Senior managers from Application Networks will be joining Reuters from today. These include Application Networks CEO, Evrard van Hertsen, who becomes Head of Product and Strategy for Reuters Trade and Risk Management; Lionel Simon who will lead Product Management, and Alex Hernandez, based in Palo Alto, who will become Chief Technology Officer for Reuters Trade and Risk Management.