OFT clearance for Local World deal

The Office of Fair Trading has today given the green light to the merger of two newspaper groups to create Local World.

The publishing group, which encompasses 180 local and regional newspapers and 60 websites, was founded in January through the merger of Northcliffe Media and Iliffe News and Media.

It had been feared that the deal would create a lack of competition in some areas where the two groups had overlapping titles. But an OFT probe found that “the merger would not result in price increases or reduced choice  for customers”.

Chris Walters, the chief economist at the competition watchdog who led the investigation, added: “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.”

The investigation also found that there was no threat to competition from the 20 per cent ownership in Local World held by Trinity Mirror. The OFT looked at whether Trinity Mirror might look to increase price or reduce quality in its own titles because of its interest in Local World.

But in a statement, the watchdog concluded that this would not be the case.

 “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.”

David Montgomery, chairman of Local World, said: “We thank the OFT for their thorough review and their conclusion.”

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