Two of the country’s largest newspaper companies have agreed to combine in the latest media deal driven by the industry’s struggles with a decline of printed editions.
GateHouse Media, a chain backed by an investment firm, is buying USA Today owner Gannett Co. for $12.06 a share in cash and stock, or about $1.4 billion. The combined company would have more than 260 daily papers in the U.S. along with more than 300 weeklies. It would be the largest U.S. newspaper company by far, with a print circulation of 8.7 million, 7 million more than the new No. 2, McClatchy, according to media expert Ken Doctor.
The long-rumored merger of Gannett’s 110 dailies and GateHouse’s 156 was announced this afternoon by both companies. The deal will formally close by the end of 2019.
GateHouse is the acquiring partner, though it is choosing to operate the new company under the Gannett name and will preserve the USA Today brand. The sale includes both cash and shares of the new company for Gannett stockholders.
The company did not supply a figure for the total value of the deal. But including Gannett debt that GateHouse assumes, it appears to be roughly $2 billion.
(Of course, scale is relative. The merged company would control an unprecedentedly large share of American newspapers. But those newspapers, even when bought in bulk, are far weaker than they were in the industry’s glory days, with shrunken revenues, circulation, and influence. And no matter how big its combined digital audience, the new company’s share of attention will still be no match for Google, Facebook, and the lesser nobility of digital advertising. It’s a very big slice of a much smaller pie.)
NiemanLab also looked at the megamerger yesterday
examining how it would go down and the consequences.