Two of Canada’s largest news publishers, Postmedia Network Canada Corp. and Nordstar Capital LP, have dropped discussions about a potential merger deal less than two weeks after announcing talks on the subject.
Postmedia, which owns papers such as the National Post, Calgary Herald, and Vancouver Sun, initially announced on June 27 that it had entered into a series of non-binding discussions to consider a “potential merger transaction” whereby both itself and Nordstar, which owns Metroland Media Group and the Toronto Star, would come under joint ownership.
The proposed arrangement would have seen Postmedia shareholders having a 56 percent economic interest in the company and Nordstar shareholders having the remaining 44 percent.
Nordstar would still have retained a 65 percent interest in Toronto Star Inc.
However, Postmedia said on July 10 that the discussions came to an end after the two companies were “unable to come to agreement on the terms of the merger.”
Postmedia’s CEO and president, Andrew MacLeod, addressed the fruitless merger talks in the news release, saying that there is still a “need for creative solutions and foundational transformation” across Canada’s media and news industry.
“Our continued focus is on protecting and ensuring Canadians’ access to reliable information,” MacLeod said. “By leveling the playing field with the tech giants and creating a healthy ecosystem, we can ensure that the media industry and journalism remain vibrant, diverse, and resilient in Canada.”
Postmedia and Nordstar previously said their merger talks represented a bid to respond to what they called an “existential threat” currently facing the media industry.
Toronto Star’s publisher Jordan Bitove said on June 27 that the “viability of the newspaper industry in Canada is at an extreme risk,” adding that Nordstar and Postmedia’s newspapers and media outlets could provide greater “access to trusted journalism and quality reporting” by pooling their resources.
Bill C-18
The merger talks between the two large media companies began shortly after Parliament passed the Online News Act into law after which both Google and Meta announced they would block all Canadian news on their platforms in order to be compliant with the act once the new legislation comes into effect.Formerly known as Bill C-18, the new law is set to come into effect this December and will require the tech giants to pay Canadian media outlets for any of their content that is linked or shared on their platforms.
Rather than cut deals with outlets and publishers, Google and Meta, which owns Facebook and Instagram, said they will instead block Canadian news on their platforms.
Heritage Minister Pablo Rodriguez has maintained that Ottawa is confident it will be able to negotiate a deal with Google by December to ensure the tech giant does not remove Canadian news from its platform.
However, he has said that the federal government is less confident in its ability to reach an agreement with Meta, which he said is the reason Ottawa decided last week to suspend all of its advertising on both Facebook and Instagram.
The Canadian Press contributed to this report.
