Two of America’s largest newspaper chains, GateHouse and Gannett, have announced a merger. The nearly $1.5 billion deal is designed to save the struggling newspaper business.
GateHouse, a media holding company that publishes newspapers in 39 states, and Gannett, a company that produces the national newspaper USA Today, as well as many local publications, announced a merger in the United States. The announcement (.pdf) is posted on the website of New Media Investment Group, the parent company of GanteHousse.
New Media is buying out Gannett for $1.4 billion, with Gannett shares going at an 18% premium to the market price. After the transaction is completed, Gannett shareholders will own about 49.5% of the combined company and the rest (about 50.5%) will be owned by New Media shareholders, the statement said.
Before the merger, New Media was one of the largest publishers of local newspapers and online media in the US, with 154 daily newspapers in 39 states. The group’s publications have an audience of 84 million people a month.
Gannett is the largest publisher in the US. Besides the flagship newspaper USA Today, the company owns more than a hundred smaller publications, a number of digital assets managed by Gannett Digital, 40 TV channels managed by Gannett Broadcasting and the British media company Newsquest. The company’s products have a combined audience of 125 million people a month.
Both companies have seen their print press revenues fall. From 2008 to 2018, newspapers lost about 57 percent of their advertising revenue and about 49 percent of their daily circulation, according to the Pew Research Center.
Executives at the merged company expect the deal to cut $275 million to $300 million in costs for the group over two years. The merger is expected to be completed by the end of the year.