By Susan Zachem

Quebecor Printing Inc. and World Color Press Inc. created the largest commercial printing company in the world with their merger agreement announced in mid-July.

The new combined company, to be called Quebecor World Inc., will have start-up assets of 173,000 facilities and 42,000 employees in the United States, Canada, and 12 other nations.

Quebecor said it acquired World Color for about U.S. $2.7 billion. The company said the deal includes $840 million in cash, an assumption of $1.3 billion in World Color's debts, and another $41 million in cash to World Color option holders.

The merger of the two companies creates a giant printer of magazines, catalogs, books, retail inserts and circulars and specialty/direct mail products. Quebecor Printing also does CD-ROM mastering and replicating.

International Pres. James J. Norton said the merger, which potentially impacts GCIU shops under contract with both Quebecor and World Color, "demonstrates that the world of printing is getting smaller as individual companies grow larger. As in other sectors where similar mergers have left only a few giants standing, it remains to be seen whether this merger is good or bad news for printing competition and the new company's customers."

Montreal-based Quebecor Printing has 115 plants and 26,000 employees in 14 countries on four continents. Prior to the merger, the company said it was the largest printer in Europe and the second largest in North America and South America. The company had $3.8 billion in revenue in 1998.

Quebecor Printing said the merger with World Color will double its annual revenues from U.S. customers to $4.7 billion, representing 75 percent of the company's 1998 worldwide revenues of $6.2 billion.

Quebecor Printing is a subsidiary of Quebecor Inc., a global communications holding company with revenues topping $8 billion. Other subsidiaries include Sun Media Corp. and Quebecor Communications Inc., which run publishing, broadcasting and multimedia operations, and Donohue Inc., which is a forest products company.

The Greenwich, Conn.-based World Color, which was founded in 1903, operates 58 facilities in the United States with 16,000 employees. The company had $2.5 billion in revenue in 1998.

According to a Quebecor press release, "a swift integration is planned upon the close of the transaction." The company is projecting about $50 million in "annual synergies," it said. The company said that printing facilities "will be integrated in accordance with client needs and commitments and will be linked to Quebecor Printing's North American fiber-optic network to facilitate work transfer and improve customer service and asset utilization."

Pierre Karl P‚ladeau, Quebecor Inc. president and chief executive officer, (CEO), who also serves as vice chairman of Quebecor Printing, said: "Quebecor is proud to be at the forefront of bringing together two of the most successful printing companies in the world. No two companies are better suited to merge for the good of improved customer service and increased shareholder value."

World Color Chairman and CEO Robert G. Burton said: "Quebecor Printing, with its global presence, and World Color, with its solid position in the United States, will create a tremendous team capable of meeting the needs of our customers through the millennium."

Under the new management structure, Charles Cavell, chairman and CEO of Quebecor Printing, will be president and CEO of Quebecor World. World Color Pres. and CEO Marc Reisch, will be chairman, president and CEO of Quebecor Printing's and World Color's combined North American operations.