Archant’s acquisition of 27 weekly newspapers previously owned by Independent News and Media has been cleared by the Competition Commission.
Questions had been raised by the Office of Fair Trading as to whether the sale of some of the titles could result in a substantial lessening of competition in the market for advertising in areas affected by the takeover.
Provisional findings published in July concluded that this would not be the case, and this has now been confirmed in the Commission’s final report.
Archant chief executive John Fry said: “We are pleased that the Commission listened to advertisers who felt that this acquisition was a positive move and recognised that London is a rapidly changing market with a high degree of competition from a range of printed and internet media.
“We are now free to address these competitive issues.
“We are delighted that our new colleagues based in London can look forward to stability after more than a year of uncertainty. The business can now address the needs of the market.”
Archant bought the titles, which cover Greater London, Essex and Kent, late last year in two separate deals worth a total of £62m – only for the deal to be referred to the Commission by the OFT in April.
At the time of the deal, it did not need the prior approval of the Secretary of State as the total average daily paid-for circulation of Archant’s existing newspapers and the papers being purchased were below the 500,000 threshold specified by the DTI.
But the sale of the newspapers straddled the December 29 implementation date of the Communications Act 2003, which gave the OFT jurisdiction over relevant newspaper mergers, and meant the Commission’s inquiry considered the effect the sale could have on the market for advertising, rather than on wider public interest grounds.
Chairman of the inquiry group, Peter Freeman, said: “After inviting responses to our provisional findings report, we’ve seen no reason to depart from our initial verdict.
“We have looked carefully at the areas affected and concluded that this merger does not give rise to significant competition concerns.
“Even in areas where Archant’s market share would be at its largest, we found there was insufficient evidence to establish that Archant would have enough market power to raise prices profitably by an amount that would cause concern,either across the board or on a targeted basis.
“This result stems from our analysis of specific markets in London and would not necessarily apply to local newspaper mergers in other parts of the country.
“Although we have received arguments that we did not have jurisdiction to consider this reference – as it concerned too small a part of the UK and that the case fell under the old Fair Trading Act regime – we disagreed with both views.”
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