Transcontinental must sell some papers in Quebecor deal
By Alastair Sharp
TORONTO (Reuters) - Transcontinental Inc (TCLa.TO: Quote) will have to sell 34 community newspapers to complete a deal to buy 74 Quebecor Inc (QBRb.TO: Quote) Sun Media weeklies, Canada's Competition Bureau said in approving the transaction on Wednesday.
The two companies said in December that Transcontinental would buy the papers from Quebecor for C$75 million ($69 million), subject to regulatory approval.
Quebecor, owner of the Sun newspaper chain, is moving away from print operations in favor of growing wireless and Internet services. The newspapers being sold, which include 22 Sun Media titles, are weeklies in smaller communities across the largely French-speaking province of Quebec.
Transcontinental in some cases would have become the owner of two competing community newspapers in a given region, the competition watchdog said.
"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," the agency said.
Transcontinental has 60 days to find a buyer for the papers, many of which only launched in recent years.
RBC Capital Markets analyst Haran Posner said buyers probably will be smaller independents in the province rather than large national or foreign publishers.
Transcontinental said even after the sale of 34 newspapers the deal should add some C$20 million to the company's operating earnings. Continued...