IRELAND’S LARGEST PRINT media group, Independent News and Media, has just announced that its proposed takeover of Celtic Media will not go ahead.
INM said on Friday that the proposed acquisition was terminated by “mutual consent”.
This deal has caused a lot of controversey, and raised serious questions about media ownership in Ireland.
Here’s what you need to know about the deal, and why it’s important.
INM and Celtic Media:
As previously examined by Fora, INM is one of Ireland’s biggest media companies and owns several Irish national newspapers including the Irish Independent, Sunday Independent, the Herald and the Sunday World.
Billionaire businessman Denis O’Brien is the company’s largest shareholder, with a 29.9% stake.
Celtic Media is a newspaper publisher that owns several regional newspapers including some of Ireland’s most prominent local publications, including the Connaught Tribune, the Anglo Celt and the Meath Chronicle.
The company, which employs about 100 people, was owned by Scottish investors until its Irish management team, headed up by chief executive Frank Mulrennan, led a buyout in 2012.
What was the deal?
INM announced in September 2016 that it intended to buy the newspapers owned by Celtic Media as part of a €4 million deal.
Celtic Media’s pre-press service was included, however its printing press business was not part of the transaction. Mulrennan was expected to join INM as part of the deal.
The acquisition would have brought the number of regional newspapers owned by INM from 13 to 20.
As with all media deals, the proposal was first investigated by Ireland’s competition watchdog, the Competition and Consumer Protection Commission.
It found that the deal would not lead to a “substantial lessening of competition” in the industry, and gave the deal the green light.
With regulatory approval secure, the deal just had to be given the thumbs up by Minister for Communications Denis Naughten.
In January, the Broadcasting Authority of Ireland was tasked with investigating the deal and recommending whether it should be allowed go ahead or not, although the final decision lay with the minister.
After the report was sent, Naughten had a deadline of June 8 by which to make a decision.
However, in the meantime the deal faced mounting opposition. The National Union of Journalists claimed that INM already owned too many regional papers and should not be allowed to further expand in that area.
Several politicians, including Sinn Féin MEP Lynn Boylan and AAA-PBP TD Bríd Smith, raised concerns about the deal in the wider context of Irish media ownership.
They pointed out that INM’s largest shareholder, Denis O’Brien, is also the owner of Communicorp, which owns multiple Irish radio stations including Newstalk and Today FM.
They said that if the Celtic Media deal went through, O’Brien would have interests in, or control, too much of Ireland’s media.
What’s the latest?
With Naughten due to make a final decision this week, INM issued a statement late on Friday in which it said that the deal was off.
It said: “INM and Celtic Media have agreed to terminate the transaction for the acquisition of Celtic Media Newspapers Limited by INM by mutual consent.
“Following discussions, INM and Celtic Media Newspapers Limited have taken a view to move forward on a separate footing.”
The statement gave no more detail as to why the deal was called off. A spokesman for INM told Fora that the company would be making no further comment, while Celtic Media did not respond to an immediate request for comment.
The NUJ said it was surprised by the announcement, but welcomed the move.
It said: “The union welcomes the lifting of this significant threat to media diversity in Ireland. The NUJ welcomed the management buy out and have worked closely with Frank Mulrennan and his staff to ensure the viability of the newspapers.
“We opposed the INM acquisition of the titles for the same reason that we welcomed the original management buyout - the protection of media diversity.”
What happens now?
The deal was a relatively small one for INM, which is estimated to have a cash pile of more than €85 million. The company’s executive team has flagged that it is on the hunt for deals, and will likely just start looking at other media deals it could get across the line.
The collapse of the deal may have more serious implications for Celtic Media. The company’s CEO, Frank Mulrennan, told an Oireachtas committee earlier this year that model for newspapers is “broken”.
He said that the only hope for regional papers may be in consolidating with bigger industry players, and said he had “serious misgivings” about the future of one of Celtic Media’s titles, the free, Meath-based Forum.
The company saw its turnover shrink from 2014 to 2015 and its profits fall from almost €900,000 to just over €200,000. The Sunday Business Post reported during the weekend that up to 100 jobs are now at risk at the media group.