Completed acquisition by Johnston Press plc of Local Press Ltd

Affected market: Publishing

No. ME/2260/06

The OFT's decision on reference under section 22 given on 6 October 2006. Full text of decision published on 16 October 2006.
 
PARTIES

Johnston Press plc (Johnston) publishes local newspapers throughout the UK, including 23 local weekly newspapers and one farming periodical in Northern Ireland. These were acquired from Score Press in August 2005. (see note 1)
 
Local Press Ltd (Local) currently publishes eight newspapers in Northern Ireland under two separate companies: Derry Journal and Century Press. Local Press's UK turnover in its last financial year was £19.1 million.

TRANSACTION

Johnston has acquired the entire issued share capital of Local. The transaction completed on 4 November 2005.

JURISDICTION

As a result of this transaction Johnston and Local have ceased to be distinct. The parties overlap in the publication and printing of newspapers and agricultural publications in Northern Ireland. The OFT believes that it may be the case that, post transaction, the parties supply over 25 per cent of publications with agricultural editorial (i.e. non-advertising content) targeted at the farming community in Northern Ireland and the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is therefore met. The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

BACKGROUND

By way of a decision of 5 May 2006 (the Decision) the OFT announced that, on the evidence available to it, the OFT believed that it is or may be the case that the merger may be expected to result in a substantial lessening of competition in relation to the supply of farming publications in Northern Ireland as it brings together the two most significant titles. A copy of the Decision is attached at Annexe 1.

On this basis, the OFT decided that the merger would be referred to the Competition Commission under section 22 of the Act unless Johnston gave suitable undertakings pursuant to section 73 of the Act to address the competition concerns arising from the merger.

Johnston offered undertakings to divest one of the farming titles it publishes in Northern Ireland called Farm Week to a purchaser to be approved by the OFT. It appeared to the OFT that this divestment would remove the substantial lessening of competition in the supply of farming publications in Northern Ireland identified in the Decision.

On 15 September 2006, the OFT published the proposed undertakings inviting interested parties to give their views on them to the OFT. The OFT did not receive any responses that suggested that the proposed undertakings were not appropriate to remedy, mitigate or prevent the competition concerns identified in the Decision.

DECISION

The merger would have been referred to the Competition Commission if Johnston had failed to give suitable undertakings pursuant to section 73 of the Act to address the competition concerns outlined above. The OFT has decided to accept the proposed undertakings in lieu of reference as they address those competition concerns for the reasons given in this decision.

This merger will therefore not be referred to the Competition Commission and the undertakings, which have been signed by Johnston, the text of which is attached as Annexe 2 to this decision, will come in effect from this date.

NOTES

1. Found not to be a relevant merger under the Act on 25 August 2005.

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