Postmedia/QMI Transaction: Overview of Merger Review Process

On October 6, 2014, Postmedia announced that it will be acquiring all of Quebecor Media Inc. (QMI)’s 175 English language newspapers, specialty publications and digital properties (including the Canoe.ca portal outside of Quebec), its Islington printing plant and 34 owned real estate properties in Ontario, Alberta and Manitoba.

The Competition Bureau will review this proposed acquisition. While media ownership concentration can raise other public interest concerns, including some of the issues listed in the FAQs below, under the Competition Act, the Bureau’s mandate is to review mergers exclusively to determine whether they are likely to result in a substantial lessening or prevention of competition.

Read the statement from the Commissioner of Competition on Postmedia’s proposed acquisition of QMI’s English-language media assets

How is a merger or acquisition reviewed by the Competition Bureau?

The goal of a merger review is to obtain the necessary evidence for careful analysis and consideration before reaching a conclusion as to whether a proposed merger is likely to prevent or lessen competition.

As part of the Bureau’s normal approach in examining a merger, the Bureau consults with a wide range of industry participants, such as suppliers, competitors, industry associations, customers and industry experts and considers many different factors, including, the definition of the relevant market, the level of concentration, and the level of competition remaining in the market.

When a merger is likely to prevent or lessen competition substantially, the Bureau generally attempts to negotiate an agreement with the merging parties without proceeding to litigation.

This approach enables a less costly and faster resolution of the matter. We prefer to resolve situations by mutual agreement rather than proceed to the Tribunal; however, if the Bureau determines that a merger is likely to considerably affect competition, it may apply to the Competition Tribunal for an order to prevent, dissolve or alter the merger. It will not compromise its responsibility to preserve competition in the marketplace.

How long does a review take?

It is difficult to determine in advance how long a particular merger review will take to complete as the Bureau evaluates the steps that need to be taken on a case-by-case basis. As always, we work with the merging parties to complete our reviews as expeditiously as possible.

For a typical, non-complex merger or acquisition, once the Bureau receives an official notification of a proposed merger or acquisition, the Competition Bureau will take up to 30 days to review. This is the case in the vast majority of transactions.

For those relatively few transactions that are complex in nature or that raise competition concerns, the Bureau may take longer than 30 days to review. Issuing a supplementary information request (SIR) to get additional relevant information from the merging parties (i.e. the companies involved in the merger or acquisition) triggers a second 30-day waiting period, which starts upon receipt of complete responses from the parties. A proposed transaction may not be completed unless and until those commitments and potentially other requirements have been satisfied.

Will the Bureau consider the potential impact on the diversity of voices?

While media ownership concentration can raise concerns, the Bureau’s mandate is to maintain and encourage competition in Canada. Under the Competition Act, the Bureau’s mandate in merger matters is limited to whether the transaction prevents or lessens, or is likely to prevent or lessen, competition substantially. For more information about the way in which the Bureau conducts its analysis, please see the Merger Enforcement Guidelines.

Will the Bureau consider the potential impact on jobs/employment?

While we understand that mergers can have an impact on employees, it is not the mandate of the Competition Bureau to consider impact on jobs/employment into its analysis of whether the merger results in a substantial lessening or prevention of competition. The Bureau’s mandate is to maintain and encourage competition in Canada. A truly competitive, dynamic and efficient market is the best guarantee of a strong economy. The Bureau does recognize the importance of conducting a timely, yet thorough, review.

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