Independent News Thwarted By UK Competition Ruling

by Robin Pilgrim, LawAndTax-News.com, London

23 October 2003

Publishing firm, Independent News and Media learned on Tuesday that it will not be permitted to sell a large chunk of its regional newspaper portfolio to American-owned Newsquest, following a ruling by the UK's Competition Minister, Gerry Sutcliffe.

Following consultation with the European Competition Commission, Mr Sutcliffe announced that the sale of 23 London-area titles to Newsquest could harm competition within local advertising markets.

"I do not believe that competition from other media is sufficient to offset any loss of competition between existing publishers," he explained.

According to the Times, which reported on the aborted deal, the Competition Minister's concerns may have stemmed from the fact that Newsquest, the second biggest player in the UK's regional newspaper market, relies upon a strategy of buying clusters of subscription and free newspapers in the same circulation area, thus allowing for the cross-selling of adverts amonst newspapers serving the same or similar markets.

Speaking following the announcement, Ivan Fallon, Independent News' chief executive, expressed disappointment at the failure of the £60 million deal, but observed that there is an "extraordinary level of demand for regional papers in the UK.

"We received a number of approaches from interested parties this morning," he revealed on Wednesday.

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