San Jose, Calif. – Federal regulators reviewing the purchase of Knight Ridder by the McClatchy Co. need more time to examine McClatchy’s proposed sale of four Knight Ridder newspapers to Denver-based ap.
The request from the Department of Justice came Monday, the final day of an initial 30-day period regulators have to review major mergers and acquisitions.
“That’s routine for a transaction of this size,” said William Dean Singleton, chief executive of MediaNews, which owns The Denver Post and dozens of other daily newspapers throughout the U.S.
Singleton said he has “no concerns” that the deal will not gain regulatory approval.
McClatchy received a request for more information on its purchase of Knight Ridder on April 26. That review is ongoing, said people familiar with the process. The latest request from regulators focuses on McClatchy’s sale of four Knight Ridder papers, including three in the Bay Area. Media News is also buying the St. Paul Pioneer Press.
While experts believe the sales won’t be blocked, an obvious area of antitrust concern is the purchase of the San Jose Mercury News, Contra Costa Times and Monterey Herald by Media News Group. MediaNews already owns seven papers in the region, which overlap in some areas with those it is acquiring.
McClatchy is selling 12 Knight Ridder papers to help finance its $4.5 billion purchase of the San Jose newspaper company. In addition to the purchase price, McClatchy is assuming $2 billion in Knight Ridder debt.
The companies have to comply with the new request for information to the satisfaction of antitrust regulators, who then have 30 days to review the responses.
A longer review period can be negotiated. Last year, 25 of 90 mergers and acquisitions reviewed by the Department of Justice required a second request for information. The average time to conclude a review was 115 days, including the initial 30-day period.
The timing may jeopardize McClatchy’s plan to close the deal to buy Knight Ridder and simultaneously sell the four papers. The sale of Knight Ridder to McClatchy is slated for June 27. It’s possible the Justice Department could approve that sale before then but take more time on the MediaNews deal, forcing McClatchy to take over the papers for a short time, something it was hoping to avoid.
Denver Post staff writer Will Shanley contributed to this report.
