CUP said that it was outsourcing its mono, two- and four-colour book and journal manufacturing to the firm from 2 July, as part of a "strategic shift to simultaneous global publication, in print or other formats".

The 428-year-old company said no job losses were anticipated among the 69 staff in its print arm, Cambridge Printing Services, although around 16 employees in administrative and pre-press roles would be at risk of redundancy. Of these, those with relevant skills could be redeployed internally, CUP said.

If the deal goes ahead, it is understood that MPG will take over a facility in the Bar Hill area of Cambridge which would be operational from March 2013. Sources claim that CUP will transfer a single KBA Rapida 105 10-colour press to the site, while it is also understood that MPG intends to deploy high-speed inkjet at the facility – a technology not currently employed at CUP.

Chief executive Tony Chard said the company anticipated investing a "substantial sum of money" in new equipment following finalisation of the deal. He offered no further comment while talks are ongoing.

Both firms met this week with CUP union members and Unite to hammer out the deal, which would see CUP’s printing staff transfer to MPG under TUPE regulations.

PrintWeek understands that CUP staff stand to lose two days’ annual holiday if the deal goes ahead and potentially a profit-related bonus, as well as practical benefits, such as a subsidised canteen and use of sports facilities.

A senior internal source told PrintWeek that the issue of bringing CUP staff holiday entitlement down from 28 days, in line with MPG’s standard 26 days, could be "a deal breaker".

"Obviously they want to respect what CUP staff have but, across the MPG group, employees have 26 days, so they want to bring it in line with that. Unfortunately I don’t know of any commercial employers that could offer them what they currently enjoy at CUP," said the source.

A deal is expected to be reached by the end of June.

• Article updated for PrintWeek magazine. Click here for the original story