Two of Canada's leading newspaper groups, Postmedia and Torstar, announced Monday a swap of 41 newspapers -- 34 of which will be shut down.

No money was exchanged in the transaction, and both companies were left on the hook for nearly 300 laid off employees' severance pay.

The deal saw Postmedia, which owns dailies in most major Canadian cities, acquire 22 weekly papers as well as two free dailies, Metro Winnipeg and Metro Ottawa -- with all but one of them on the chopping block.

Meanwhile, Torstar -- which publishes Canada's largest circulation daily, the Toronto Star -- and its subsidiary Metroland acquired 15 weekly and small-town daily newspapers mostly in Ontario, as well as free dailies 24 Hours Toronto and 24 Hours Vancouver.

Metroland, citing falling advertising revenues, will also shutter three daily and eight community publications.

"The newspaper industry in Canada is facing challenging times due to declines in recent years in print advertising revenues and the fact that newspapers are now facing increased competition for digital advertising dollars from international giants such as Google and Facebook," the company said in a statement.

Postmedia chief executive Paul Godfrey echoed that the costs of publishing the small community newspapers in the region made them no longer viable.

"By acquiring publications within or adjacent to our primary areas and selling publications outside our primary areas we will be able to put a greater focus on regions where we believe we can be more effective in serving both customers and clients," said Torstar president John Boynton.

The CWA Canada union representing media workers called the deal a "deathblow to local news coverage."

Source:AFP