Quad/Graphics and LSC Communications have mutually agreed
to terminate their merger agreement, under which Quad would have acquired LSC,
Quad announced on July 23.
The all-stock transaction was announced on
Oct. 31, 2018, and was approved by shareholders of both companies in February.
In June, the U.S. Department of Justice sued
to block the acquisition, and in July the U.S. District Court for the Northern
District of Illinois set a litigation schedule that includes a trial that would
start in mid-November at the earliest and that would not result in a decision
on the merits until 2020.
The parties have determined that the added
delay, uncertainty and cost of legal challenges would have likely eroded
expected benefits of the merger, Quad said in a news release.
As required by the merger agreement, Quad will
pay LSC a reverse termination fee of $45 million.
“We are disappointed by the Justice
Department’s decision to sue to block the transaction and believe that the
lawsuit does not reflect the dynamics of print today and the competitive effect
of digital media,” said Joel Quadracci, Quad chairman, in the release.
“However, rather than devote time and resources to prolonged litigation, we are
choosing to focus on ensuring that our clients benefit from our Quad 3.0 growth
strategy through exciting innovations in printing and integrated multichannel
marketing solutions that reduce complexity, increase efficiencies and enhance
marketing spend effectiveness,” he said.
No comments:
Post a Comment