The U.S. Justice Department said on Thursday it had filed a lawsuit aimed at stopping Quad/Graphics Inc from buying LSC Communications, two of the biggest companies that print books, magazines and catalogs.
The Justice Department’s Antitrust Division said the two companies were each other’s biggest rivals, citing internal documents that refer to a price war and a “two-horse race between LSC and Quad.”
The $1.4 billion deal was announced in October 2018.
“American publishers and retailers rely on Quad and LSC to print and distribute billions of magazines, catalogs and books each year,” said Makan Delrahim, an assistant attorney general in the Antitrust Division. “If this deal were allowed to proceed, Quad would dominate the markets for magazine, catalog and book printing services and be able to raise prices.”
LSC Communications said in a statement the Justice Department “has reached the wrong conclusion in its assessment of the transaction,” adding that it will join Quad “in vigorously defending the lawsuit in court.”
Quad’s chief executive, Joel Quadracci, said the company is “fully committed to defending the DOJ’s lawsuit in court.”
In its complaint, filed in federal court in Illinois, the Justice Department said Quad and LSC were the only realistic option for many publishers because of their complex printing equipment. It cited at least one bidding war between the two that resulted in the offer of a $10 million signing bonus.
The complaint also noted that executives of the two companies had complained about the competition, with one lamenting that a publisher was “exploiting the fact that LSC [and] Quad[‘s] CEO’s want to beat each other into oblivion.”
Source: Reuters.com