The OFT statement: The completed joint venture, known as Local World, brings together the local and regional newspaper businesses previously owned by Daily Mail & General Holdings and Yattendon (Northcliffe Media Ltd and Iliffe News & Media Ltd respectively), comprising over 180 local and regional newspapers and 60 websites between them. The main overlaps between the Northcliffe and Iliffe titles are in Derbyshire and Staffordshire.
The OFT carefully examined a range of evidence provided by these companies and third parties for the areas where the Northcliffe and Iliffe print titles overlap. The OFT did not examine in detail the parties' overlap in websites given that the parties' activities in these markets are limited. The range of evidence provided by the parties, including data on the number of customers advertising in both parties' titles and switching their advertising purchases between their titles, showed that the parties' titles did not compete closely for customers before the merger. On the basis of that evidence, the OFT found the merging of the Northcliffe and Iliffe businesses will not result in price increases or reductions in choice or quality for readers or advertisers.
In addition, the OFT considered whether Trinity Mirror's stake of approximately 20 per cent in the joint venture may give rise to competition concerns, through price increases or reductions in quality of Trinity Mirror titles. The investigation concluded that it would not, since the loss that Trinity Mirror would incur from increasing prices or reducing quality of Trinity Mirror titles would outweigh the benefit it might derive from such behaviour by virtue of its stake in the rival Local World titles.
OFT Chief Economist and decision maker in this case, Chris Walters, said:
“The parties provided significant evidence on each of the overlap titles which led us to conclude that the merger would not result in price increases or reduced choice for customers.
“We hope this case, alongside our other recent merger decisions in this sector, will assist any businesses considering future transactions in local newspaper markets, and help identify the evidence the OFT will find useful in assessing the impact on competition.”
In response to the OFT statement, David Montgomery, Chairman of Local World, said: “We thank the OFT for their thorough review and their conclusion.”
