The Federal Trade Commission has cleared the way for Valassis to acquire Advo Inc. for $1. 3 billion.
Specifically, the FTC allowed a waiting period mandated under Hart-Scott-Rodino Antitrust Improvements Act of 1976 to expire without taking any action, according to news reports.
This move allows the merger to go forward, pending approval by Advo shareholders and other customary closing conditions, according to Valassis.
With the acquisition, the company will have 7,900 employees with operations in nine countries. It will stay headquartered in Livonia, MI, and will maintain a substantial presence in Windsor, CT (Direct Newsline, July 2).
The company, best known for freestanding inserts, said it would now serve 20,000 advertisers worldwide, including 94 of the top 100 advertisers in the U.S.
This will include Advo’s shared mail business, which reportedly penetrates up to 114 million households, adding substantially to Valassis’ weekly newspaper distribution of over 60 million households.
Some industry executives see benefits the merger to both companies.
“Advo faced a $30 million postage rate increase,” leading it to want a merger, said Vince Andaloro, president of Latin-Pak, a St. Louis-based cooperative mailer.
“I’m not sure if this merger signifies any trend, but I do think that Valassis will now be able to charge what it wants for freestanding inserts,” added Jim Zuckermandel, president of Zed Marketing, an Edmond, OK insert media management firm.
The transaction is expected to close in two or three months.
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