A Look At Merger Review in Light of Corporate Consolidations in Communications

AuthorAviva Farbstein
PositionHas a BA in Broadcast Journalism from Concordia University and an MA in Communications Studies from the University of Calgary.
Pages14-23
1“ Hollinger Inc.,
Hollinger International
Inc., and its Affiliates
Announce the Sale of
CDN $3.5 Billion of
Canadian Assets to
CanWest Global
Communications
Corp.” (31 July 2000)
online: Hollinger
International, News
Release
.
com/press/2000/Press_
073100.htm> (date
accessed: 6 October
2000) [hereinafter
“Hollinger”].
2T. Cole, “A Mogul in
the Making” The Globe
and Mail (29 September
2000) B1.
Introduction
The communications industry has undergone enormous change in
recent years, due in part to new technologies, shifts in regulatory
philosophy and consumption patterns, and greater international
competition. These changes have coincided with a trend of mergers and
takeovers in the industry. All of these factors together blur the lines that have
been drawn around specific communications sectors, and bring into
question the sufficiency of the legislation, regulation, and regulators now in
place to deal with a quickly converging and evolving industry.
This paper looks at the merger review system in Canada, using as an
example the recently announced deal between CanWest Global
Communications Corp. (“CanWest”) and Hollinger Inc. (“Hollinger”). It
examines the interplay between sectoral regulation and general competition
law. In it, I will examine the historical reasons for the state of the law in
Canada, with some reference to the experiences of other countries, since this
is an area where there is a great deal of international consultation.
The Deal
On July 31, 2000, Hollinger and CanWest announced that CanWest
would purchase most of Hollinger’s Canadian assets for approximately
$3.5 billion in cash and shares.1Hollinger possessed the Southam group of
newspapers, which publishes daily newspapers in most major Canadian
cities, and the nation-wide National Post. Hollinger also owned a large
number of community papers throughout the country, trade publications,
and Internet properties including canada.com. CanWest bought most of the
community newspapers, trade publications, all the metropolitan dailies, and
50 per cent of the National Post, as well as the Internet assets, and the
Southam Magazine and Information Group.
CanWest owns television stations, cable channels, and radio stations
in Canada, and production, program distribution, and media assets.2
in Light of
Corporate Consolidations
in Communications
Merger Review
A look at
Aviva Farbstein has
a BA in Broadcast
Journalism from
Concordia University
and an MA in
Communications
Studies from the
University of Calgary.
She is currently in her
second year of law
school at the University
of Victoria, where she
will graduate in 2002.
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