New Media Buying Gannett for $1.4 Billion to Form News Giant

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New Media Investment Group Inc. agreed to acquire Gannett Co. in a $1.38 billion deal that unites the two biggest U.S. daily newspaper chains in an industry that’s consolidating to survive.

The merged entity will be a local news giant that owns more than one-sixth of all daily newspapers in the country, including USA Today, and reaches nearly 9 million print readers, according to industry analyst Ken Doctor. All told, it will have 263 daily media outlets across 47 states.

The acquisition also sets the stage for further cutbacks in an industry already reeling from them. The companies said the deal will better allow them to provide marketing services to local businesses, deliver local journalism to communities and transition to a digital future. But they also said they anticipate about $300 million in cost savings each year from the transaction, which could lead to further cuts to news staffs. The combined company said it would invest in its newsrooms and search for cost reductions “in a judicious manner.”

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