SUSSEX — The Department of
Justice filed a civil antitrust lawsuit Thursday to block
Quad/Graphics, Inc. from acquiring LSC Communications Inc., which
Quad said it will “vigorously defend.”
The Antitrust Division’s lawsuit alleges if it would go through, the
“transaction would combine the only two significant providers of
magazine, catalog, and book printing services, denying publishers
and retailers throughout the country the benefits of competition
that has spurred lower prices, improved quality, and greater
Quad Chairman, President & CEO Joel Quadracci quickly issued a
statement defending the pending acquisition.
“We believe the acquisition of LSC will result in
time-and-cost-saving opportunities for clients while protecting jobs
for employees. We also believe that the business combination will
create a highly efficient print manufacturing and distribution
platform that will strengthen the role of print in an increasingly
multichannel media world that is dominated by digital advertising,”
The DOJ filed its lawsuit in the U.S. District Court for the
Northern District of Illinois.
“LSC is Quad’s primary competitor. If this deal were allowed to
proceed, Quad would dominate the markets for magazine, catalog, and
book printing services and be able to raise prices and reduce
quality at the expense of publishers, retailers, and, ultimately,
American consumers,” Assistant Attorney General Makan Delrahim of
the Justice Department’s Antitrust Division in a statement.
Quadracci responded that the DOJ doesn’t acknowledge the “dynamic
conditions” present in the U.S. commercial printing industry.
He said that the industry has about 50,000 companies and generates
about $76 billion in aggregate annual revenues.
“Neither Quad nor LSC accounts for more than 5 percent of that total
print industry revenue. By comparison, two digital media companies,
Google and Facebook alone, have worldwide digital ad sale revenues
totaling more than $75 billion — nearly the same amount as the
entire printing industry,” Quadracci said.
The competition from other forms of media is another key point to be
considered, Quadracci said.
Quad/Graphics Inc. is headquartered in Sussex and offers a variety
of printing services, including magazine, catalog, and book
printing, to publishers across the country. In 2018, Quad’s revenues
were approximately $4.2 billion.
LSC Communications Inc. is a Delaware corporation headquartered in
Chicago. In 2016, it was spun off from printing firm R.R. Donnelley
and offers the same magazine, catalog, and book printing services as
Quad. In 2018, LSC’s revenues were approximately $3.8 billion.