The proposed sale of Independent News & Media's UK regional newspapers to publishing giant Newsquest could force up prices for local advertisers, the UK competition watchdog has warned.
The exhaustive list of possible objections to the £60 million deal (€86 million), outlined in a statement from the competition commission yesterday, includes fears it will give Newsquest too big a market share.
The watchdog is also worried there could be a loss of quality at London-based titles such as the Islington and Hackney Gazettes, saying it would look at the deal's effect on "accurate presentation of news, free expression of opinion and editorial policies".
Committee members would have to consider "whether the merger would lead to reduction in choice or quality of local newspapers for readers or advertisers", the commission said.
Other newspaper groups could find their entry to local markets inhibited if Newsquest gained too great a market share, the watchdog added.
Newsquest's share of the market would almost treble, rising from 21 per cent to 57 per cent, according to the commission's current estimates.
In the relevant areas of south London, Newsquest would own an estimated 72 per cent of the market, double what it has now, with some pockets of almost 100 per cent coverage, the watchdog said.
It will also examine the financial details of the deal and the prospects for the newspapers under their old and new management.
The commission warned it could scupper the deal in its entirety or block the "transfer of certain titles or divisions where the transfers might give rise to high market shares in particular localities".
The deal, which was referred to the commission in May, would not normally have come under scrutiny because all the newspapers involved sell on average less than 50,000 copies each.
But concerns arose over the concentration of ownership in London areas, where Newsquest - the second largest regional newspaper group in the UK, with more than 300 titles - already has a number of newspapers such as the Hounslow Guardian and the Leyton and Leytonstone Guardian.
The competition minister, Ms Melanie Johnson, has asked the regulator - whose committee includes former Observer editor Mr Donald Trelford - to report to her by August 19th. Selling the London titles is part of Independent's strategy to bolster its balance sheet and reduce debt.
The acquisition is the latest in a series of deals by Newsquest. In the past two years it has bought the Surrey and Sussex newspapers group and the Dimbleby newspaper group.
In March its parent company, Gannett UK, sealed a £216 million deal to buy SMG's Glasgow titles, the Herald, Sunday Herald and Evening Times.
- (Guardian Service)
