Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Canada Competition Bureau reaches consent agreement on acquisition of community newspapers, (May 28, 2014)

The Competition Bureau announced today that it has reached a Consent Agreement with Transcontinental Inc. with regards to its proposed acquisition of 74 community newspapers from Quebecor Media Inc. The Consent Agreement aims at preserving competition in the sale of advertising in community newspapers in several areas in Quebec by requiring that 34 community newspapers be put up for sale.

Pursuant to a Share Purchase Agreement entered into on December 5, 2013, Transcontinental agreed to acquire all of Quebecor Media’s 74 community newspapers in Quebec, including web, mobile, and printed formats, as well as regional offices and pre-press hubs located in Rimouski, Saint-Georges, and Val-d’Or. On December 9, 2013, Quebecor Media also announced that it was ceasing door-to-door distribution of community newspapers and flyers in Quebec. The Bureau examined this decision and concluded that Quebecor Media’s exit from distribution is unlikely to result in a substantial lessening or prevention of competition as a result of the proposed transaction.

In each regional market where the Bureau found that the transaction could potentially result in a substantial lessening or prevention of competition for advertising space in community newspapers, the Consent Agreement requires that at least one newspaper be offered for sale. In its position statement regarding the proposed acquisition, the Bureau noted that the proposed sale process aims to preserve competition by providing the opportunity for a third-party to purchase and operate the newspapers independently, to the benefit of both readers and advertisers.

In order to support the sale of the newspapers, the Consent Agreement requires that they be offered for sale by an independent party at no minimum price and that Transcontinental provide distribution and printing services to any potential purchaser, upon request, for a specific period of time.

In reaching this Consent Agreement, the Bureau considered the financial distress of many newspapers and the ongoing transformation of the community newspaper industry.

"The Bureau understands that many communities are concerned and do not want to lose their local newspaper,” said John Pecman, Commissioner of Competition. “As many newspapers are in financial distress owing to the ongoing transformation of the community newspaper industry, the Bureau’s Consent Agreement seeks to maintain competition in local markets through a sale process in regions where the parties strongly compete against one another."

Companies: Transcontinental Inc.; Quebecor Media Inc.

News: Antitrust