The big business story of the day in Canada is a major media deal involving two of the giants of the newspaper world.

The owner of the Vancouver Sun and Province, Postmedia Network Canada Corp., announced that it's paying $316 million in cash for Quebecor's 175 English-language Sun Media newspapers, its English-language digital entities, an Ontario printing plant, and 34 real-estate properties in Ontario, Alberta, and Manitoba.

Postmedia president and CEO Paul Godfrey said in a conference call with analysts that the deal will help his company "survive and compete" against large foreign-based digital operators, such as Google and Facebook.

"Adding Sun Media publications to the Postmedia network will create a stronger Canadian-managed company with a digital scale required to compete more effectively and potentially regain some of the share of the advertising space that's been lost to the technology-driven giants to the south," Godfrey said.

He noted that the price is actually $306 million because it includes a $10-million adjustment, which is mostly related to real-estate properties that will be sold by Sun Media prior to closing.

The Sun chain includes not only the daily Sun tabloids in Calgary, Edmonton, Winnipeg, Ottawa, and Toronto, but also the London Free Press and the 24 hours daily papers in Vancouver and Toronto. Sun Media also owns 140 weekly community papers and specialty publications.

In addition to the Vancouver Sun and Province, Postmedia owns eight other daily papers in Canada, including the National Post, the Gazette in Montreal, Ottawa Citizen, Calgary Herald, and Edmonton Journal.

The deal is subject to regulatory approval from the Competition Bureau.

If the transaction goes through, it will leave Postmedia as the owner of three daily papers in Vancouver. The company no longer owns any local community papers after selling them to Glacier Media in 2011.

In its last fiscal year, Postmedia posted a loss of $160.2 million on revenues of $751.6 million. It lost $20.6 million in the first-quarter of 2014 on revenues of $171 million.

At the end of the first quarter, it had total assets of $818 million and total liabilities of $741 million, including $472.2 million in long-term debt. More than half of the long-term debt, $284.1 million, was in 12.5-percent senior secured notes denominated in U.S. dollars.

"The transaction will be a deleveraging event that will improve Postmedia's capital structure and reduce our combined net leverage ratio from 3.8 times to 2.9 times and inject it with new equity," Godfrey noted. "There is also further potential for deleveraging through monetization of Sun Media's real estate portfolio. The acquisition will provide significant incremental free cash flow and improve the financial strength of this combined entity."