Shareholders of New Media, Gannett sign off on deal, which will close in the next several days
The two biggest newspaper chains in the country are on the verge of combining, after shareholders of both gave green lights to the $1.13 billion deal Thursday.
New Media Investment Group, which operates under its GateHouse Media subsidiary, is expected to close on its acquisition of USA Today parent Gannett Co. in the next several days, now that the last remaining hurdles have been cleared.
New York-based New Media owns the Austin American-Statesman and 153 other daily newspapers, including The Progress-Index in Petersburg, the Columbus Dispatch in Ohio and the Palm Beach Post in Florida. Gannett, based in McLean, Va., owns USA Today and 109 dailies, including the Detroit Free Press and the Arizona Republic. Its other Virginia-based holding is The News Leader, a daily newspaper in Staunton.
The combination of the two chains will create a nation-blanketing print and digital giant, with more than 260 daily newspapers, and hundreds more websites and community and weekly newspapers stretching across 47 states. The new company will be called Gannett even though New Media is the acquirer.
The deal will have repercussions for news consumers and journalists across the United States.
Advocates have characterized it as an effort to craft a digital-centric business model for the combined company that will enable it to compete against the likes of Google and Facebook, which have dominated the market for online ads. But critics have said it will lead to layoffs and dilute the quality of journalism that citizens depend upon.
The cash-and-stock deal originally was valued at about $1.4 billion to Gannett shareholders when it was announced in August. But it has slipped since then, along with New Media’s share price, and most recently was valued at about $1.13 billion.
By Bob Sechler, GateHouse Media