Montreal, December 12, 2006 – Transcontinental today announced an agreement to sign an exclusive five-year contract with Hudson’s Bay Company (Hbc) for all flyer printing for Zellers, The Bay, Home Outfitters and Hbc Loyalty Programs. The contract also includes extensive use of Transcontinental’s value-added product and service offering that supports its market-leading flyer-printing capabilities, including catalogue printing, the full suite of direct marketing services including database analytics, custom publishing and, in select regions, flyer distribution. The five-year contract begins February 1, 2007 and is valued at approximately $350 million, of which approximately $75 million is new business for Transcontinental.

“This contract with a major retailer of Hudson’s Bay Company’s stature demonstrates the success of our strategy to expand our product and service offering over the past several years,” said Guy Manuel, president of Transcontinental’s Marketing Products and Services sector. “Thanks to that strategy, the 30-year relationship we have enjoyed with Zellers, Transcontinental’s oldest flyer-printing client, has now expanded into a more comprehensive partnership to serve more of the marketing needs of all of Hbc’s divisions. Like many retailers, Hbc is supplementing its flyers with more one-to-one marketing initiatives, something they recognized Transcontinental, as Canada’s number-one direct marketer, is well positioned to help them with. We are extremely pleased to partner with Hbc, and aim to develop more such expansive contracts with other large retailers.”

Michael Rousseau, President, Hbc, said: “Hbc’s successful relationship with Transcontinental over the past 30 years coupled with their superior printing network and the depth of products and services made them the best choice as a marketing partner. We look forward to enjoying the same quality and service in our new campaigns with them that we’ve come to depend on from Transcontinental as our long-time flyer printer.”

About Transcontinental
The largest printer in Canada and seventh-largest in North America, Transcontinental also ranks as the country’s leading publisher of consumer magazines and French-language educational resources, and its second-largest community newspaper publisher. Transcontinental distinguishes itself by creating strategic partnerships that integrate the company into its customers’ value chain, notably through its unique newspaper printing outsourcing model and its value-added services. From mass to highly personalized marketing, the company offers its clients integrated solutions which include a continent-leading direct marketing offering, a diverse digital platform and a door-to-door advertising material distribution network. Transcontinental is a company whose values, including respect, innovation and integrity, are central to its operation.

Transcontinental (TSX: TCL.A, TCL.B) has more than 14,000 employees in Canada, the United States and Mexico, and reported revenues of C$2.2 billion in 2005.

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