New Media Investment Group and Gannett Decided to MergeOn July 5, the owner of GateHouse Media, New Media Investment Group, announced that the company will buy the leading newspaper publisher Gannett Co., Inc. The two companies are going to settle the cash-and-stock deal that priced up to $1.38 billion. The deal expected to close by the end of the year.
New Media Investment Group and Gannett will merge as one company operating under the name Gannett. New Media Investment Group is going to hold 50.5 percent of the combined company. Meanwhile, Gannett will get the other 49.5 percent. The current CEO of New Media Investment Group, Michael Reed, will be at the top of the combined companies. Then the CFO of combined companies is Gannet’s chief financial officer, Alison Engel. The current Gannett CEO, Paul Bascobert, is expected to lead the subsidiary of combined companies. This new hybrid company will be located at Gannett’s headquarters, Greater Washington DC, U.S. Its board is going to be consisted of five directors from New Media Investment Group, three from Gannett, and New Media's current lead director, Kevin Sheehan.
The joined forces of two companies aims to save $275-$300 million for annual costs in 24 months. They will increase their growth after deal settled and operate more than 260 daily news operations. Other than cutting cost, this deal is also their strategy to maximize the digital media revenue by gaining more online audience. So that they can secure news operations. Currently, the print media revenue doesn’t look good for both companies.
According to the Pew Research Center, newspapers lost about 57% of their advertising and circulation revenue. They also had to lose about 49% of their weekday print circulation in 2000-2018. The data can be supported by Gannett's digital-only subscriptions, which rose 34% to 561,000 in the second quarter. It proved Gannett’s ability to attract digital media subscriber that will be useful in the combined companies. Besides of it, Gannett’s shares had closed up 2.6% at $11.04. As for the shares of New Media Investment Group, it closed down 7.6% at $9.89.