Is It Good if Donnelley Gets Quebecor?

From the outside, last week’s approach by RR. Donnelley to buy Quebecor World may seem like a familiar sparring of two publicly traded firms—one intent on buying, the other possibly a more diffident about the possible transaction. But in this case it is the bankruptcy judge and the creditor committees whose opinions will carry the greatest weight on whether RR Donnelley is permitted to buy Quebecor World. (In case you missed the whole thing, last week the number one U.S. printer made public a detailed offer to acquire the number two U.S. printer, posting its proposal letter for the acquisition on the business wires late on Tuesday, May 12. 
It’s unlikely antitrust issues will arise from Donnelley’s open-letter entreaty to Quebecor World. The printing industry is extremely fragmented. And frankly, the barriers to entering the printing business are low. So new competitors could arise easily. Given the proliferation of modestly-priced and automated digital printing engines, and the ready availability of low-priced lightly-used offset presses, anyone can become a printer, if they dare to, or care to. Protecting against the concentration of printing manufacturing is low on the list of U.S. Federal Trade Commission concerns these days, what with true monoliths like Google and Intel to worry about.
So what’s good about all this for the average commercial printing company? Well, the notion of a very large RR Donnelley, intent on becoming bigger still, can create obstacles in the minds of smaller customers. These are clients who want someone to hold their hand through the print buying process, and who may not have a highly technical professional print buying expert onboard to engage the services of their printer. While Donnelley may be remarkably skillful and adept at scaling itself to handle any size client, some customers have demonstrated a preference for its competitors—whether the choice is driven by cultural sympatico or competitive pricing.
The ongoing expansion of Target Corp. Printing Services may also be telling. Here is a firm that lauded supplier Wallace in 1997 for handling much of its internal manuals and documentation needs. But somewhere between the acquisition of Wallace by Moore and the acquistion of Moore Wallace by RR Donnelley, the retailing giant decided to increase its internal print plant, growing last month by 50% to nearly 90,000 sq.ft. 
And so, printing sales managers may want to keep their prospecting teams in high alert, and watch the the opportunities to be of service if this transaction progresses.