Competition Bureau continues review of Postmedia-Torstar deal
Officials from Canada’s Competition Bureau executed search warrants at the offices of Torstar and Postmedia on Monday, as the watchdog investigates the sale of multiple publications between the two companies.
Torstar (TSb.TO) and Postmedia (PNCa.TO) announced the exchange of 41 local newspapers last November. Postmedia said it would close 24 community papers, including 21 of the 22 it acquired from Torstar, which also announced 11 closures. Postmedia’s closures were expected to cut 244 jobs, while Torstar shed 46.
The Competition Bureau said that it would review the deal shortly after it was announced to assess whether it contravened Canada’s Competition Act.
Torstar spokesperson Bob Hepburn confirmed the bureau’s visit at its offices in a Monday statement.
“Today, officials from the bureau visited Torstar’s corporate offices in Toronto seeking more information about the transaction with Postmedia to purchase and sell a total of 41 publications and we are cooperating completely with them,” Hepburn said.
“In addition, as previously communicated to the bureau, Torstar will be voluntarily providing the bureau with additional company documents relating to the transaction.”
Postmedia said in a statement after the bureau’s visit that it believes the deal should not raise any red flags.
“Postmedia is strongly of the view that there has been no contravention of the Competition Act with respect to this matter,” the company said in a statement Monday. “Postmedia is cooperating with the Competition Bureau in connection with their investigation.”
The Competition Bureau said there is "no conclusion of wrongdoing" in a statement on Monday, adding that no charges have been laid.
"In response to news reports and questions from the media, I can confirm that the Competition Bureau is investigating alleged anti-competitive conduct contrary to the conspiracy provisions of the Competition Act. The Bureau is also examining this matter under the merger provisions of the Act," Commissioner of Competition John Pecman said.
"Investigators with the Bureau are currently gathering evidence to determine the facts relating to the alleged conspiracy. There is no conclusion of wrongdoing at this time and no charges have been laid."
The two media companies did not notify the Competition Bureau of the transaction before announcing the deal because it does not meet the threshold for the Competition Act, which applies only to deal where assets or sales revenues exceed $88 million.
The regulator has said that transactions of all sizes are subject to review by the Commissioner of Competition.