Britain's newspaper distributor sells assets to rivals

Posted by Erina Lin on August 3, 2009 at 11:19 AM

Dawson Holdings Plc, newspaper and magazine distributor in the UK, has sold assets to its competitors, Reuters reported.

Smiths News Plc and John Menzies announced it had invested 1.5 million pounds and 0.5 million pounds on Dawson's assets, respectively.

The two companies have earned several newspaper distribution contracts from Dawson recently, which results in the end of Dawson's news operations. The contracts will be effective immediately, according to the companies.

According to Smiths, its sales would increase about 250 million pounds in the year to August 2010 as a result. However its costs would be higher than usual in this short timeframe.

About 1,800 employees at Dawson will transfer to Smiths, Reuters reported.

Dawson said in a separate statement that its two subsidiaries comprising its news distribution business, Surridge Dawson Ltd and Solent SD Ltd, had been integrated into administration.

The company's remaining units supply business including newspapers, magazines to airlines, providing marketing services and distribute books to academic institutions.

Smiths News shares dropped 1.1 percent at 113.75 pence at noon GMT Monday, while John Menzies rose 0.6 percent at 180 pence, Reuters reported.