WASHINGTON — News Corp. and Heritage Media Corp. have agreed to give Justice Dept. lawyers more time to study the companies’ plan to merge their coupon business.
The total value of the deal is $1.3 billion but it also calls for the immediate spin-off of Heritage’s six TV stations and 24 radio stations to Sinclair Broadcast Group Inc. for $630 million. Sinclair’s purchase of the broadcast properties is contingent on the mergers of News Corp. and Heritage.
A News Corp. spokesman said lawyers in the Justice Dept.’s San Francisco field office are concerned because Heritage and News Corp.’s FSI magazine coupon business are the only two companies that distribute coupons in stores. FSI has deals with approximately 2,000 supermarkets; Heritage has 40,000 stores. There are no other significant competitors in the in-store coupon market.
Antitrust attorney Joe Sims said it is not enough for Justice Dept. attorneys to prove that the merged company will create a monopoly. The government, he said, must also prove that there are barriers to potential competitors who want to get into the same business.
The News Corp. spokesman said the Justice Dept. is expected to take another three weeks looking at the deal.