Wednesday, July 31, 2019

Quad, LSC cancel merger


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: