The Competition Commission has approved Novus’ bid to acquire Media24’s media logistics and community newspaper portfolio.
The deal is the result of a strategic shift that put 400 jobs at risk as Media24 announced earlier this year that it was seeking to close the print editions of five newspapers, transitioning three of them into digital-only brands.
On Thursday, the Commission — which investigates antitrust matters and markets structures in SA — said it had approved the
proposed transaction, with conditions.
The Naspers-owned media group is selling its media logistics business, On the Dot, and its community newspaper portfolio to Novus Holdings subject to regulatory approvals.
Novus is active in the provision of printing services to customers across multiple sectors, including education, retail, government and media. The company is also active in the publishing and sale of educational materials.
In its assessment, the Commission had considered Novus’ coldset printing services. Coldset printing is required by publishers of newspapers and advertising leaflets.
The On the Dot business, that forms part of Novus’ takeover, is a specialist logistics provider to SA’s print industry, including magazines, newspapers, leaflets and books.
As such the Commission found that competition concerns may arise “if the merged entity requires its customers to either (i) exclusively procure coldset printing services and distribution services from the merged entity or (ii) procure printing/distribution on condition that the customer also procures distribution/printing services.”
This is because the merged entity’s competitors are not able to offer a similar bundle.
To address this concern, the Commission and the parties have agreed that for three years after the implementation of the merger, the merged entity will offer coldset printing and distribution services separately.
To minimise possible job losses from the transaction, “the merging parties shall not retrench any employees as a result of the merger for a period of three years from the merger implementation date,” said the competition body.
Novus and Media24 have also agreed that for a period of three years post the merger, “any Media24 employees who are retrenched for operational reasons unrelated to the merger will be rehired on a preferential basis, where vacancies at either Novus Group or Media24 arise and provided such employees are suitably qualified and experienced.”
Rival Caxton had made a competing offer for the assets earlier in the year, but was rebuffed.
Ishmet Davidson, then CEO of Media24, said at the time: “Selling the community newspaper portfolio to Capital Newspapers/Caxton will give them (direct and indirect) ownership of 76% of the community newspaper market in SA.”
Davidson stepped down as CEO at the start of September.
Print editions on the chopping block at Media24 include Beeld, Rapport, City Press, Daily Sun and Soccer Laduma, as well as the digital editions of Volksblad and Die Burger Oos-Kaap and the digital hub SNL24.
Those transitioning to digital-only publications are Rapport, City Press and Daily Sun. As digital brands, these will reside on the group’s Netwerk24 and News24 platforms.
The company also appears to be shutting down two of SA’s best-known magazine publications, Drum and True Love.
Caxton had previously approached the Competition Commission to oppose the closure of the titles and the sale of the media logistics business.
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