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4 June 2008 By Una Galani Follow @ugalani

The UK market research firm has agreed an allshare deal with GfK. Yet its German rival comes with big execution risk and a potential poison pill. If WPP even marginally improves its offer to compensate for part payment in its own more volatile paper, TNS should change its tune.

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UKbased TNS and Germany's GfK on Tuesday agreed to an all share nilpremium merger of equals to create the world's second biggest market research company with a market value of around £2bn.

Under the terms of the deal, TNS would offer 11.74 new TNS shares for each GfK share. Assuming full acceptance of the offer by GfK, each company would own 50% of the combined group. GfK's largest shareholder Verein would control 28%.

TNS and GfK said they expected annual synergies of £76m within three years, delivering a combined 15% operating margin. GfK Chairman Hajo Riesenbeck will be chairman of the new group. TNS Chief Executive David Lowden and GfK finance director Christian Weller von Ahlefeld will both continue in their existing roles.

Last month, TNS rejected a cash and share takeover offer from WPP Martin Sorrell's worth 242p at the time. The offer is currently worth 239p.

TNS shares are currently trading at 258p.

Context News

UKbased TNS and Germany's GfK on Tuesday agreed to an all share nilpremium merger of equals to create the world's second biggest market research company with a market value of around £2bn.

Last month, TNS rejected a cash and share takeover offer from WPP Martin Sorrell's worth 242p at the time. The offer is currently worth 239p.

TNS shares are currently trading at 258p.

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