Canadian flags line the road around Parliament Hill during the National Day of Honour ceremony in Ottawa May 9, 2014.
Canadian flags line the road around Parliament Hill during the National Day of Honour ceremony in Ottawa May 9, 2014. The event marks the end of Canada's military mission in Afghanistan. Reuters

The Canadian print media space is witnessing its biggest acquisition. Leading publishing group, Postmedia, with its proposed buyout of Quebecor's chain newspapers that publishes the Sun tabloid, is aiming to become Canada's single largest publisher of English newspapers. Postmedia owns a big brand like "National Post" besides many broadsheet dailies. The deal size is $316 million.

The buyout is going to create a newspaper giant in Canada with many cities seeing all their major dailies coming from one company, reported Huffington Post. In Vancouver, the Sun broadsheet and the Province are already owned by Postmedia. Post-acquisition, in cities such as Ottawa, Calgary and Edmonton the major dailies will be owned by Postmedia.

Brand Canada

Postmedia board chairman Rod Phillips said in a statement that the new investment by Postmedia is a strong endorsement of the future of Canadian newspapers and made-in-Canada journalism. He said it was exciting to become the custodians of Canada's best known media brands.

Now the board of directors of both the companies has to approve the deal and get the regulatory approval. John Pecman, Commissioner of Competition Bureau said his agency will review the deal. The Bureau has the mandate to review all mergers to determine whether they lead to substantial reduction or elimination of competition.

Industry Consolidation

Postmedia said it would finance the deal through a combination of debt and equity from the existing shareholders. Quebecor is trying to focus on its telecom business Videotron and in the Sun News Network.

Pierre Dion, CEO of Quebecor noted that the deal came at the right time. The newspaper revenues had been declining and print media has to compete with the digital media for advertising dollars. He said the Canadian newspaper business had been looking for a consolidation to remain viable. Paul Godfrey, CEO, Post Media, said the acquisition has brought together an impressive stable of brands to create a stronger Canadian media platform to compete against foreign-based digital offerings. This will offer a greater choice to the readers. Reuters reports that in the changed scenario, Postmedia will face main competition from Torstar Corp, which publishes the Toronto Star and Globe and Mail.