Transcontinental buying 74 Sun Media community papers in Quebec for $75 million

MONTREAL - Transcontinental Inc. (TSX:TCL.A) says its media division is buying 74 community newspapers and associated web properties in Quebec from Sun Media for $75 million.

The agreement has been approved by the boards of both companies but Sun, a subsidiary of Quebecor Inc. (TSX:QBR.B), will continue to operate the papers until the transaction closes.

The deal doesn't include Le Journal de Montreal, Le Journal de Quebec, 24 heures in Montreal or the QMI news service, but does include the rest of Sun Media's newspapers in Quebec.

The deal requires regulatory approvals, including from the Competition Bureau.

The deal was announced a day after Sun Media announced the layoff of another 200 employees across Canada, including 50 journalists outside Quebec.

Sun Media's best-known properties outside Quebec are the Sun newspapers in Toronto, Ottawa, Winnipeg, Calgary and Edmonton. It also publishes 24 Hours free dailies in those cities as well as paid-circulation papers in numerous Ontario cities.

Transcontinental (TSX:TCL.A) says the deal for the Quebec community papers will add about $20 million in operating income before amortization.

Quebecor Media also agreed to print some of its magazines and direct marketing materials with Transcontinental Printing starting in February.

Transcontinental also announced Thursday that its net losses in the fourth quarter nearly doubled to $92.2 million as revenues fell 3.2 per cent to $566.3 million.

Adjusting for one-time items, it earned $58.2 million, down six per cent from $61.9 million a year earlier. Earnings for the period ended Oct. 31 decreased by two cents per share to 75 cents.