New Media and Gannett have announced the acquisition, which will see the creation of the largest US local-to-national news organization, with 263 daily publications across 47 states along with more than 160 Newsquest brands in the UK.
New Media, which runs the Gatehouse chain of local community newspapers in the USA, says the move will lead to “cost synergies of $275-$300 million annually”, while also allowing it to “invest in newsrooms.”
However the National Union of Journalists has warned that the deal will mean “more months of uncertainty” for UK journalists.
The newly-merged company will adopt the Gannett brand and continue to be based at Gannett’s HQ in McLean, Virginia.
New Media chairman and chief executive Michael Reed will remain in charge of the merged group, with newly-appointed Gannett CEO Paul Bascobert running its operating subsidiary.
Attaching a note from outgoing Gannett chairman Jeff Louis, he wrote: “I would highlight his comment that in New Media we have found a strong partner for Gannett with a shared mission to create the largest local media organization and best-in-class marketing solutions partner – something which is of course at the heart of our Newsquest strategy in the UK.”
Michael Reed said: “We believe this transaction will create value for our shareholders, greater opportunities for our employees, and a stronger future for journalism.
“Gannett is an innovative, digitally-focused media and marketing solutions company with well-known brands worldwide. Uniting our talented employees and complementary portfolios will enable us to expand our comprehensive, hyperlocal coverage for consumers, deepen our product offering for local businesses, and accelerate our shift from print-centric to dynamic multimedia operations.
“We are honored to become a part of Gannett’s storied history and a steward of their strong media properties into the future.
“We are committed to delivering significant synergies in a thoughtful manner, consistent with our shared goals for the business.”
Jeff Louis added: “The Gannett board unanimously determined that this combination with New Media is in the best interests of Gannett shareholders, customers, audiences, and employees, providing significant and immediate value, as well as the ability to benefit from the upside potential of the combined company.
“We see numerous opportunities to leverage the combined company’s enhanced scale and financial strength to continue to drive growth in the digital future.
“Importantly, we have found in New Media a strong partner and cultural fit for Gannett as we continue delivering on a shared commitment to journalistic excellence for the communities we serve.”
NUJ general secretary Michelle Stanistreet commented: “For hundreds of our members in Newsquest, today’s announcement will mean months of further uncertainty as regulatory approval is sought for this merger of the two biggest newspaper groups in the US and we wait for the detailed corporate strategy to become clear.
“Little is known about New Media Investment on this side of the Atlantic and today’s announcement barely mentions Newsquest, so we don’t know at this stage what the new company leadership will bring for our hard-working members in this country.
“However, we will be working with our American colleagues in the coming weeks and months to understand what this might mean for our members on both sides of the Atlantic.
“While it is positive that New Media talks about a ‘shared commitment to journalistic excellence’ we note that it is thought the combination of the two companies could bring savings of up to $300 million (£245 million) annually. We would urge that this publicly pledged support for high quality journalism should come with greater investment in journalists and journalism.”