Printing merger between Sun and Daily Mail owners waved through by competition authority

Plans by the publishers of the Sun and Daily Mail to combine their print operations have been waved through by the Competition and Markets Authority (CMA).

The watchdog announced at the start of February that it was looking into the proposed joint venture between Daily Mail and General (DMG Media) and News Corp UK and Ireland (NewsUK).

The plans, which were first announced last October, will see the combination of the printing operations of NewsUK and DMG Media printing sites in Thurrock, Essex and Dinnington, South Yorkshire.

A new company will run the operations and would be independent and have its own senior leadership team drawn from NewsUK and DMG Media.

The merger has previously been cleared by the Competition and Consumer Protection Commission a month after it was announced.

News UK executive vice president, chief operating officer, David Dinsmore said: “It has been our long-term view that consolidating print operations is vital to retaining a national network of print and distribution logistics and, crucially, supporting the unique plural media landscape in the UK.

“I’m delighted that the CMA has cleared the combination of our printing operations.”

James Welsh, deputy chief executive officer of DMG Media, added: “Today’s announcement from the CMA is an important milestone for our industry.

“The combination will ensure that our readers, and those of other newspapers, can enjoy the paper they love for many years to come.

“It has been an uncertain time for our production teams and I would like to thank them for their continued dedication and professionalism.”

In its decision, the CMA said the deal is a “relevant merger situation that does not give rise to a realistic prospect of a substantial lessening of competition”.

It added: “The CMA found that the Parties are not particularly close competitors.

“The CMA has placed limited weight on the parties’ market shares, instead placing greater weight on bidding data and the estimates of spare capacity for third-party printing.

“It has also taken into account the impact on the market that News UK’s closure of its Knowsley site would have had.

“The CMA examined internal documents from the parties and assessed evidence submitted from third parties.

“The bidding data indicates that they do not compete materially for third-party newspaper printing services.

“In the North of England, the parties have not bid for the same contract at any point over the past eight years.

“Moreover, News UK’s decision to close its Knowsley site absent the merger ensures that they would not have competed in the North of England had the JV not gone ahead.

“In the South of England, although News UK is the largest printer in the region, DMGH only prints de minimis volumes for third parties and has acted as a weak constraint because its Thurrock site uses a printing process (flexographic) that is more expensive than the printing process (offset) used by other providers.

“Additionally, the JV creates more spare capacity in the North of England than in the counterfactual scenario where News UK’s Knowsley site would have closed.

“In the South of England, there will be less total capacity post-merger but there will still be an excess of spare capacity. Having spare capacity means that, post-merger, customers can have their printing needs met in both the North and the South of England.

“The JV will continue to face competition from Reach, an established provider of third-party printing for all kinds of services including broadsheet newspapers, and from Newsquest.”

The ruling comes as the CMA is expected to announce a decision on the planned merger between Vodaphone and Three by the end of the week.