The two largest book retailers in Quebec are clear to proceed
with a proposed asset purchase transaction, according to a
statement released by the Competition Bureau on September 29,
A subsidiary of Groupe Renaud-Bray inc. (Renaud-Bray) will
acquire 14 French-language bookstores, 1 English-language
bookstore, and the associated web operations from Groupe
Archambault Inc. (Archambault). All of the target assets are
located in Quebec.
In the course of its investigation into the possible
anti-competitive effects of the transaction, the Bureau was
primarily concerned with the following issues:
the potential impact of
Renaud-Bray's increased ability to influence the number of
titles produced or books sold by publishers in Quebec;
the ability of Renaud-Bray to secure
more favourable trade terms with suppliers that could then be
passed on to the consumer in the form of higher suggested retail
the likelihood of a post-merger
increase in Archambault's retail prices.
The investigation revealed that, given the relatively low
wholesale price elasticity of publishing books for general
readership, it is unlikely that the number of titles would be
significantly affected by Renaud-Bray's increased
post-transaction business volume. In addition, the Bureau found
that a material increase in retail prices of trade books would
simply not be profitable.
As to the potential for horizontal market harm, there was no
indication that the presence of Renaud Bray or third party
competing bookstores had an impact on Archambault's
pre-transaction pricing strategies.
Based on the results of the investigation and the fact that over
150 independent accredited bookstores will continue to operate in
Quebec post-transaction, the Bureau was satisfied that the proposed
acquisition is unlikely to result in a substantial prevention or
lessening of competition in the purchase and sale of
French-language trade books in Quebec.
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