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News Corp. deal scrutinized
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July 28, 1997: 3:50 p.m. ET
Justice Dept. to challenge purchase of Heritage Media, say companies
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NEW YORK (CNNfn) - The Department of Justice plans to object to News Corp.'s proposed $1.35 billion acquisition of Heritage Media Corp. due to antitrust concern, the two companies said Monday.
News Corp. agreed on March 17 to buy the media and marketing services company for $754 million in stock and the assumption of $600 million in debt.
In addition to owning six television and 24 radio stations, Heritage owns ActMedia, the world's largest provider of in-store marketing products and services. It's that business that is cause for concern, said James Platt, News Corp. spokesman.
News Corp. had hoped the March acquisition would help solidify its own, much smaller in-store marketing business. News Corp.'s marketing business operates in 2,100 stores while ActMedia operates in about 40,000.
However, the Justice Department's antitrust division in San Francisco has recommended against the acquisition, according to the companies, and an official challenge from the department is expected in a few weeks.
In the meantime, the companies say, antitrust division staff have requested an extension from Heritage Media and News Corp. to allow all the parties to review the issues.
An official with the Justice Department would not comment except to acknowledge the investigation is ongoing.
The companies said in a joint statement Monday they will grant the extensions but will vigorously pursue regulatory approval of their deal.
"There are a number of steps to keep getting it reviewed," Platt said.
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