The proposed acquisition of the Celtic Media Group of local newspapers by Independent News and Media (INM) plc has been referred for a full media merger review to the Broadcasting Authority of Ireland by Communications Minister Denis Naughten.

Last November, the Competition and Consumer Protection Commission approved the acquisition of the Celtic Media Group by INM.

The CCPC (formerly the Competition Authority) ruled that "the transaction would not lead to a substantial lessening of competition" in the areas of business concerned.

However, the proposed acquisition by INM, which publishes the Irish Independent, and 'Sunday Independent', as well a number of local newspapers including the 'Fingal Independent', 'The Kerryman' and the 'Sligo Champion', is now the subject of a review under Section 28e of the Competition Act 2002.

Minister Naughten must assess - under legislation governing media takeovers - whether the deal has implications for media plurality.

If the minister is concerned that a media merger may be contrary to the public interest in protecting plurality of the media in the State, he can request the BAI to carry out a full media merger examination.

INM said it will co-operate fully with the Authority in the review process.

"Consolidation within the print media sector, which is undergoing significant challenges, is essential for its survival," said the company.

"Combining these two groups of regional papers would strengthen the overall newspaper channel in Ireland. Celtic Media Group's publishing division comprises six weekly regional newspapers, a bi-weekly newspaper, and a pre-press service. Celtic Media's printing business is not part of the transaction".

The proposed deal will see Independent News & Media Holdings Ireland Limited (INM Holdings), a wholly owned subsidiary of INM, acquire the entire issued share capital of CMNL Limited (CMNL).

CMNL owns seven regional newspapers, including the 'Anglo-Celt' in Cavan and the 'Meath Chronicle'.

The National Union of Journalists had opposed the move and claimed INM should not be allowed to further expand its newspaper stable.

The CCPC said its investigation identified four distinct product markets in which the businesses operated.

These markets are newspaper publishing (which includes advertising and readership); pre-press services to local/regional publishers; printing services to local/regional publishers; and the distribution of local/regional titles.

The CCPC said its analysis involved in-depth economic assessment of the affected markets, consideration of detailed submissions from the parties involved, as well as consultations with competitors of the merging parties and other third parties.

"The CCPC concluded that, although both INM Holdings and CMNL are involved in publishing local/regional newspapers, there is very limited overlap between their activities and the transaction would not lead to a substantial lessening of competition in any of the product markets mentioned above," said the commission.

"Following the determination by the CCPC, the parties must submit a separate notification to the Minister for Communications, Climate Action and Environment. Section 28 of the Competition Act 2002 sets out the process by which the Minister for Communications (and, where applicable, the Broadcasting Authority of Ireland) will assess the merger separately in relation to media plurality".