Archant's London deal faces monopoly threat

Archant chief executive John Fry may find new titles hard to hang on to

Archant could be forced by the Government to sell three or more of its London weekly newspapers.

According to the Office of Fair Trading, Archant’s purchase in December of 27 London papers from Independent News & Media “may result in the creation of a near monopoly in several areas”.

It has referred the matter to the Competition Commission and a decision is expected in October.

The Norfolk-based newspaper publisher said that it “remains convinced that the acquisitions are pro-competitive”.

Archant is the UK’s fifth biggest regional newspaper publisher and two years ago announced a company aim of doubling turnover within seven years.

The December deal to buy IN&M’s London local papers for £62m was considered by many in the industry to be a coup pulled off under the noses of rival publishers.

Newsquest was blocked by the Competition Commission in its bid to buy the titles last year and Northcliffe was in the process of getting regulator approval for the purchase when Archant concluded the deal.

Because Archant’s total sales were less than 500,000 at the time, it did not need prior approval from the Competition Commission for the deal.

This is the first newspaper merger to be referred to the Competition Commission since the Communications Act 2003 came into force in January. It transfers responsibility for newspaper mergers from the Department of Trade and Industry to the Office of Fair Trading.

The 27 titles bought by Archant included the Hackney Gazette, the Hornsey Journal, the Camden Chronicle and the Gravesend & District Express.

According to the OFT, it has “concerns” about the Stratford Express, the Barking & Dagenham Post and the Romford & Havering Post.

And it said the purchase of the Islington Gazette, the North London Herald, the East London Advertiser and the Ilford & Redbridge Post could result in the creation of a “near monopoly” because of Archant’s other holdings.

Remedial measures asked for by the OFT could vary from guaranteeing the preservation of separate editorial and advertising departments to forcing the sale of some titles. The regulator may also say that no action is needed.

An Archant spokesman said: “We will be reviewing the OFT’s decision and analysis and will be working to satisfy the Competition Commission of the pro-competitive nature of this transaction during the inquiry.

“We believe that the competitive framework is broader than that considered by the OFT and this inquiry will allow us to develop our arguments.”

By Dominic Ponsford

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