Two of the country’s largest newspaper companies – Gatehouse and Gannett – have agreed to combine. GateHouse Media is buying USA Today owner Gannett Co. for $12.06 a share in cash and stock, or about $1.4 billion.
Mike Reed, chairman and CEO of GateHouse parent New Media Investment Group, will retain his title. Paul Bascobert, a former Bloomberg Businessweek executive, joins the new company as operating CEO.
“We believe this transaction will create value for our shareholders, greater opportunities for our employees, and a stronger future for journalism,” Reed said. “Gannett is an innovative, digitally-focused media and marketing solutions company with well-known brands worldwide.”
The Tallahassee Democrat is a Gannett owned paper.
The Wall Street Journal reported that the “deal combines the largest owner of U.S. newspapers by titles—GateHouse, with 400 papers and a total circulation of 4.29 million—and the largest newspaper group by circulation—Gannett, with a circulation of 4.32 million and 215 titles including USA Today, according to a University of North Carolina study.”
The deal is expected to be finalized by the end of 2019. Gannett shareholders will own roughly 49.5% of the combined company, with New Media shareholders owning the rest.
The companies said the deal will cut up to $300 million in costs annually and help speed up a digital transformation.
In addition to efficiencies from combining certain operations, newspaper economic analysts indicate that savings will come from the consolidation of top regional management positions.