R.R. Donnelley's unsolicited offer last month to buy its bankrupt rival Quebecor World for $1.35 billion met with mixed reaction from b-to-b publishers.
Although some publishing executives said an acquisition by Donnelley would help shore up Quebecor's customer base, others expressed concern that such a merger would be anti-competitive. Donnelley has more than 150 printing plants worldwide; Quebecor has about 90.
Neither Donnelley nor Quebecor World would discuss the potential deal beyond their initial statements regarding the offer.
Quebecor, which filed for bankruptcy protection in January, announced last month that it had reached an agreement with its creditors that would allow it to emerge from bankruptcy as early as mid-July. Meanwhile, the company has taken steps to reduce costs, including a 10% across-the-board salary cut announced in April.
“Clients who have been worried about Quebecor's financial situation are now relieved because the business will have better support [from Donnelley],” said a printing industry analyst who requested anonymity. “On the other hand, there's a lot of concern that Donnelley is going to become so huge, and it could get suspect by taking so much bandwidth of print publications.”
Glenn R. Filippone, VP-production at Incisive Media, whose products include Accountancy Age, Law Technology News and The National Law Journal, was blunter.
“It's scary if you take one major player out and are left with one major player,” he said. “I don't think this would be a good deal for b-to-b media companies because it removes competition.”
Incisive signed a three-year deal with Quebecor last summer. Since Quebecor filed for bankruptcy in January, there has been no change in quality or delivery, Filippone said.
If Donnelley buys Quebecor, Filippone added, it could prove limiting for business publishers, “There could be consolidation, and Donnelley could combine some plants,” he said.
Other publishers said that if the merger were followed by rate increases, publishers could take their business elsewhere.
“There are a lot of second-tier players who we could go to without losing quality or pricing power,” said Rick Maurer, director of production at Briefings Media Group, a small publisher whose titles include American Painting Contractor and FacilityCare.
Ned Borowsky, president-CEO of North American Publishing, regularly meets with major printers and in May hosted Quebecor executives to get a sense of their services. “We discovered that [Quebecor] offers a range of services outside of our [R.R. Donnelley] contract that we found to be of interest,” he said. “My sense after the meeting was that Quebecor has a bright future once it emerges from Chapter 11.”