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Postmedia, Torstar offices raided in newspaper swap probe

The Competition Bureau of Canada conducted searches at the corporate offices of Postmedia Network Canada Corp. and Torstar Corp. as part of the regulator's investigation into whether a November 2017 asset exchange between the two companies should have been reviewed by the regulatory body.

Postmedia and Torstar have said the asset swaps were not reported to the Competition Bureau because they did not meet the threshold for the Competition Act, which applies to deals where assets or sales revenues exceed $88 million. The transaction involved swapping 41 publications, of which 36 were subsequently shut down, the Financial Post reported. The companies said they expect to save between $5 million and $7 million in annual operating costs as a result.

The regulator said that at the time of the deal, all transactions were subject to a review by the competition commissioner to determine whether they will substantially reduce or prevent competition in any market. However, in a statement given to the Post, Commissioner of Competition John Pecman said "there is no conclusion of wrongdoing at this time."

Postmedia said in a March 12 statement that it is "strongly of the view" that no contravention of the Competition Act occurred in the transaction and stressed that it is cooperating with regulators in the investigation. Separately, Torstar also said that it is "cooperating fully" with the Competition Bureau in connection with its review.