March 25, 2015 — OTTAWA, ON — Competition Bureau
Following an extensive 5-month review of Postmedia's proposed acquisition of Sun Media's English-language media assets (including print newspapers and digital properties), the Competition Bureau has concluded that the proposed transaction is unlikely to substantially lessen or prevent competition.
As a result of its review, the Bureau will not, at this time, oppose the proposed transaction due to a combination of factors that will ensure continued competition, such as:
- the lack of close rivalry between Postmedia's broadsheet and Sun Media's English-language tabloid newspapers;
- existing competition from free local daily newspapers;
- the incentive for the merged company to retain readership and maintain editorial quality in order to continue to attract advertisers to its newspapers; and
- the increasing competitive pressures from digital alternatives in an evolving media marketplace.
During its review, the Bureau conducted consultations with a broad range of market contacts and made use of a range of analytical tools.
As such, the Bureau has issued a No Action Letter confirming that it will not challenge the proposed transaction before the Competition Tribunal under the merger provisions of the Competition Act.
- As part of its review, the Bureau assessed the potential impact of the proposed acquisition on both advertisers and readers.
- The Bureau also took into consideration the dynamic nature of media markets and the challenges faced by traditional media in adapting to an increasingly digital world. However, its review revealed that both readers and advertisers continue to value newspaper content and advertising in spite of the proliferation of digital alternatives.
- Postmedia made persuasive submissions to the Bureau suggesting that the proposed transaction is likely to bring about meaningful gains in efficiency.
- In reviewing mergers, the Bureau considers many different elements, including the level of economic concentration in the relevant industry and the characteristics of the merging parties and their competitors.
- As part of its 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.
"Given the importance to Canadians of competitive media markets, the Bureau conducted an extensive review of this merger. We found that advertisers and readers continue to value print newspapers, despite the growth of online sources as an alternative. However, our review concluded that there would not be significant anti‑competitive effects for readers or advertisers arising from the proposed transaction. The Bureau is a strong advocate for competition, and will continue to ensure that Canadian media markets remain competitive and efficient."
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The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.