Britain’s competition watchdog has launched a probe into plans by publishers of The Sun and Daily Mail to combine their printing operations.
The Competition and Markets Authority (CMA) said it is considering whether the merger will “result in a substantial lessening of competition”.
It follows the announcement last October that Rupert Murdoch’s News UK and Lord Rothermere’s DMG Media – two of the UK’s biggest newspaper publishers – plan to combine their printing operations amid a climate of declining print sales.
The companies said they believed the proposal would help improve the efficiency of their print operations and establish a sustainable business model for the future of national newspaper printing in the UK.
The companies, which publish titles including The Sun, The Times and Daily Mail, would create a new company (NewCo), which would run their combined print operations.
While the proposal would retain the three current printing sites used by News UK’s Newsprinters – Broxbourne, Knowsley and Eurocentral – it could potentially mean the closure of two of DMG Media’s sites in Thurrock and Dinnington.
The CMA is now consulting on the planned tie-up until February 15, ahead of a March 28 deadline for the first phase of the inquiry.
The deal is set to see all national newspaper printing being handled by just two conglomerates, with the new joint venture also printing titles including The Telegraph, Evening Standard and Financial Times, as well as the Metro and titles for the regional publisher Newsquest among others.
The only other national printing operation is run by Mirror and Express owner Reach.
The move by News UK and DMG Media was expected to spark an investigation by the CMA.
At the time the tie-up was announced, DMG Media group production director Julia Palmer-Poucher said: “The decade-long decline in print circulation has not been matched with changes to print capacity and we must find ways to keep physical newspapers, which have an important future, commercially viable.
“This proposed combination would provide a long-term solution for the Mail print titles and a sustainable future for the newspaper printing industry.
“We are aware this will be an uncertain time for those potentially impacted and our priority is to provide staff with the support they need throughout this process.”
Darren Barker, the managing director of News UK’s Newsprinters UK, insisted on unveiling the merger last October that the joint venture was a “genuinely exciting solution”.
“The reality is that print readership has been in decline for some years now, and the sector has come under increasing pressure to better align capacity with demand.
“I believe this joint venture is a genuinely exciting solution which sets out a long-term sustainable future for the newspaper printing industry, clients and the national daily newspaper ecosystem in the UK.”