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Last Updated: Tuesday, 17 May, 2005, 09:59 GMT 10:59 UK
Yell dials up deal to buy US peer
Yell logo
Yell has a huge presence in the US
UK telephone directory publisher Yell is buying US peer TransWestern for 829m ($1.58bn) on the back of a surge in full-year profits.

The deal means Yell's US operation, Yellow Book, will be the fifth-largest directory publisher in the US.

Underlying earnings for Yell rose by 12% to 402.8m in the last year.

The purchase of TransWestern will see Yell source half of its revenues and nearly half of its operating profits from the US.

Yell owns the UK's Yellow Pages directory business and is the largest independent US directory publisher.

Probe underway

However, its UK prospects are currently under threat from a probe by the Competition Commission, which will make its report at the end of June 2006.

We are confident that this time around we'll get a solid hearing ( from the Competition Commission)
John Condron, chief executive

Yell has attempted to allay the concerns of the competition watchdog, despite controlling more than three quarters of the UK directories market.

It argues that competition is robust from rival online advertising outlets and in newspapers.

Reading-based Yell is constricted in the UK by a price cap linked to the rate of inflation, and current inflation rates mean that the company effectively has to cut prices each year.

"The Competition Commission has fairly wide powers, but having put our case to them we are confident that this time around we'll get a solid hearing," said chief executive John Condron.

The new revenue stream from the US should offset any regulatory problems at home.

However, Mr Condron denied that the regulatory environment in the UK had inspired the purchase of TransWestern.

Yell has completed 26 acquisitions in the US since 1999, including McLeod and National Directory Company.

The TransWestern deal follows the sale two days ago of European phone directories publisher YBR to Australia's Macquarie Capital Alliance Group for 1.21bn.

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