The Competition Tribunal has approved the merger between Media24, Paarl Coldset and the Natal Witness, subject to certain conditions.
Although the tribunal approved this large media merger, it came with conditions in a bid to protect smaller players in the market.
The Competition Tribunal announced on Monday that the merger – which was criticised by Media24’s rival, Caxton, who intervened in the merger proceedings – recommended that it be approved with a set of conditions.
According to the agreement, the Natal Witness sells the Craib family’s remaining shares in the newspaper to Media24, which already owned part of the publication.
The problem, however, was that the merger would cause Media24 to acquire an even bigger chunk of shares in Africa Web, a printer of community newspapers in KwaZulu-Natal and the Eastern Cape. This was because the Natal Witness owned shares in Africa Web.
The commission expressed concern about this because it created the possibility that Media24 could use its increased control of Africa Web to exclude Africa Web’s existing customers – community newspapers – from the market in a bid to entrench the position of their own publications.
The tribunal imposed the following conditions for a five-year period from the date of the order:
– The KwaZulu-Natal and Northern Eastern Cape community newspaper publishing businesses within the Media24 group, and representatives thereof, must have no influence over operational and/or strategic decisions at Africa Web. This restriction applies, amongst other things, to representation on the Africa Web board;
– Media 24 and Paarl Media must undertake to use their control over Africa Web to ensure that any material printing asset of Africa Web cannot be sold by Africa Web or transferred out of Africa Web without the Tribunal’s prior approval.
The tribunal also ordered that Media24 and Paarl Media notify the commission of all future small mergers with both publishers and printers.
Media24 and Paarl Media were ordered to undertake to use their control over Africa Web to ensure that its current printing capacity was maintained.
The merging parties must make at least 1 000 tons of printing press capacity available to small independent publishers for five years.
Also, Africa Web must continue to print for any small independent publishers on certain terms.
Publishers supported by the Media Diversity and Development Agency (MDDA) in KwaZulu-Natal and the northern Eastern Cape should also be offered printing services.
Africa Web was ordered to submit an annual report to the commission on all matters pertaining to its compliance with the conditions.
* Media 24 is a company involved in the publishing and printing of magazines and newspapers, including the provision of electronic news and magazine content on the internet.
* Paarl Coldset, the other acquiring firm, is part of the Paarl Media Group and is active in the market for coldest printing, the type of printing used to print high volume newspapers.
* The Natal Witness publishes and prints various regional and community newspapers which are primarily distributed in the Pietermaritzburg and surrounding areas of KwaZulu-Natal as well as high volume commercial inserts and pamphlets.
* Caxton, the intervening party in this case, is a publisher and printer of books, magazines, newspapers and commercial print in South Africa.
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