GateHouse buys Gannett for $1.4B, building newspaper giant

New Media Investment Group buying Gannett for $1.4B

FBN's Cheryl Casone on New Media Investment Group's deal to buy Gannett for $1.4 billion.

A deal was confirmed on Monday that consolidated more of the newspaper industry.

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Gannett, the publisher of USA Today is being bought by Gatehouse Media for roughly $1.4 billion.

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The deal creates a new industry giant that hopes to manage the crisis of print's decline through sheer size.

GateHouse Media is the owners of the Austin American-Statesman, Palm Beach Post and many papers in small- and mid-sized towns.

Reports of a deal involving Gannett have been circulating since May of this year.

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GCIGANNETT CO INC10.26+0.13+1.28%

GateHouse is part of New Media Investment Group, itself a unit of private equity firm Fortress Investment Group.

Fortress' owner is Japanese tech giant Softbank.

GateHouse Media is promising to speed up a digital transformation as readers shift online, while cutting $300 million in costs every year.

According to a study by the University of North Carolina, the U.S. has lost almost 1,800 local newspapers since 2004. Newsroom employment fell by a quarter from 2008 to 2018, according to Pew Research, and layoffs have continued this year.

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The combined company would take the Gannett name and keep its headquarters in Gannett's current home of McLean, Virginia. GateHouse's owner New Media is buying Gannett Co. for $12.06 a share in cash and stock.

The Associated Press contributed to this article.