New Media, Gannett shareholders approve media merger deal

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 — and counts a group of Northern Michigan newspapers including the Petoskey News-Review, Charlevoix Courier, Gaylord Herald Times, The Sault News and the Cheboygan Daily Tribune among its properties — 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.

“We appreciate the support we have received from New Media and Gannett shareholders for the merger,” said Michael Reed, chairman and chief executive officer of New Media. “This combination will create the leading U.S. print and digital news organization with deep local roots and national scale.

“Together, we will be stronger, with a more viable path to growth for our shareholders and employees, while sustaining journalism in hundreds of markets across the country and enhancing the services we provide to small and midsized businesses nationally,” Reed added. “We are extremely excited upon this new chapter together as the new Gannett.”

New Media and Gannett expect to complete the merger on Tuesday, Nov. 19, subject to the satisfaction of customary closing conditions.

In October, the European Commission provided regulatory clearance for New Media’s proposed acquisition of Gannett and it was also approved by the Securities and Exchange Commission.

New York-based New Media owns the Austin American-Statesman and 153 other daily newspapers, including 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.

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.