Postmedia Network Canada Corp.'s $316-million purchase of Sun Media's English-language news properties is officially a done deal.
The acquisition closed Monday, less than three weeks after the Competition Bureau announced it would not stand in the way, even though it ushers in a major concentration of written media in some major Canadian cities such as Calgary, Edmonton and Ottawa.
Quebecor Inc. is selling 175 newspapers and digital publications, notably the Sun chain of papers in Calgary, Edmonton, Toronto, Ottawa and Winnipeg, plus The London Free Press. The deal also includes the free 24 Hours commuter dailies in Toronto and Vancouver, the English-language Canoe online portal and more than a million square feet of real estate.
More than 2,500 Sun Media employees now work under new ownership, though some jobs are in jeopardy. Postmedia president and CEO Paul Godfrey expects the deal to yield efficiencies through combined finance, human resources, IT and production departments.
"With the completion of this transaction Postmedia becomes one of Canada's largest newsmedia companies with even more compelling, made-in-Canada offerings for marketers," Mr. Godfrey said in a statement. "For our readers and audiences, we will continue to deliver the content they value most from their favourite Postmedia and Sun Media brands – across all of our platforms."
The acquisition signals an unprecedented concentration of the country's newspapers and digital news sites. Postmedia takes ownership of both major dailies in three big cities: The Sun and Herald in Calgary, the Sun and Journal in Edmonton and the Sun and Citizen in Ottawa. It previously owned both The Vancouver Sun and The Province in Vancouver, which it used as an example to make its case to the Competition Bureau.
Mr. Godfrey has said he intends to maintain separate newsrooms and keep both publications open in those markets, and to evaluate the business prospects of the many smaller papers acquired. But he also noted that the Canadian media market has changed, and such a deal would have been unlikely to be approved even 10 or 20 years ago.
The newspaper company already secured financing for the purchase, supported by its largest shareholder, the U.S. hedge fund GoldenTree Asset Management. Postmedia issued $140-million of debt subscription receipts and, earlier this month, completed a rights offering that raised $173.5-million. It will also use proceeds from the sale of the Montreal Gazette production facility and some corporate cash to finance the Sun Media purchase.
Quebecor has kept its French-language titles, including Le Journal de Montréal.