Britain moves to reverse IN&M sale

IN an unprecedented move, the British Office of Fair Trading (OFT) has acted to reverse the €88.7 million off-loading by Independent News & Media of its regional titles in the London area.

This will be the first time the OFT has invoked its powers to refer a merger to the Competition Commission (CC).

If the CC blocks the sale of the newspapers by the Tony O'Reilly-led IN&M to Archant Regional Limited it could cause problems for the owners of the Irish Independent and Sunday Independent newspapers as the sale was largely completed by December 2003.

Responding to the announcement, IN&M said:

"To date, Independent has received stg£57.0m in cash and anticipates receiving the remaining stg£5.0m once the regulatory process is completed. Ownership of all Independent's 27 London regional titles was transferred unconditionally to Archant in December, at which stage Archant took on responsibility for any further regulatory review."

This is the second time IN&M's attempts to sell the profitable titles have run foul of British regulatory authorities, as earlier in 2003 IN&M was stopped by the British Department of Trade and Industry (DTI) from selling eight of its newspaper titles in the London area to US publishers Gannett.

The DTI's decision came as a result of a CC report on the proposed transfer to Newsquest (London) Ltd a subsidiary of Gannet of 23 newspaper titles owned by Independent News and Media UK Limited, which are distributed in the Greater London area.

The OFT's director of competition enforcement Vincent Smith, said yesterday: "The acquisition by Archant of three titles in North and East London has similar characteristics to transactions that recently gave the Competition Commission concern. And the transfer of another four titles may result in the creation of a near monopoly in some neighbouring areas. So we believe that the Competition Commission needs to look at this merger in greater depth."

The OFT said the CC is expected to report in October.