'Metro' Poised to be Latin America's Biggest Newspaper

By: Mark Fitzgerald Metro International, the big publisher of free commuter dailies worldwide, has retreated from the U.S. market, and even pulled back in some European cities. But Tuesday it announced a franchise agreement and joint venture to relaunch two Metro papers in Ecuador -- a move it says will make its formatted paper the largest in Latin America.

Metro's agreement is with Grupo Hoy, a multimedia company that publishes Metro Hoy in Quito and Metro Quil in Guayaquil. Combined as Metro Ecuador, the papers are the fourth most-read in the nation.

The papers will relaunch Wednesday using Metro's global newspaper format.

The joint venture, called Diarios Unidos del Ecuador S.A., or Diunesa, has acquired 100% of the Metro Ecuador papers. Metro said it will initially hold a 15% equity interest in Diunesa with an option to increase the stake in the future. Metro said will account for its interest in the company as equity participation and will also receive franchise fees reflecting Metro International's operational support of the joint venture.

Grupo Hoy said the joint venture with Metro represents the first-ever foreign investment in newspapers in Ecuador.

With its interest in the two Ecuadorian Metros, Luxembourg-based Metro says its Metro will be the largest in Latin American with combined distribution of more than 500,000 copies dailies in six cities in four countries: Mexico City, Monterrey, Sao Paulo, Santiago de Chile, Quito and Guayaquil.

"Launching in new markets through franchise agreements with local partners has proven to be a very efficient way for Metro International to penetrate new markets and to quickly establish a strong market position," Metro International CEO Per Mikael Jensen said in a statement. "The launch in Ecuador is in line with our global strategy to expand in growth markets such as Latin America where we, in spite of the global economic downturn, are experiencing strong growth.

"Grupo Hoy has already built up a strong relationship with readers and clients for both Metro Hoy and Metro Quil," he continued. "When combining this healthy starting point with the implementation of Metro International's global newspaper format, the prospects for the Metro joint venture in Ecuador become even more promising."