Aug. 5 (UPI) -- The owner of GateHouse Media agreed to purchase Gannett, the publisher of USA Today, in a deal worth about $1.38 billion, both companies announced Monday.
New Media Investment Group said it will acquire Gannett for a cash-and-stock deal that will result in New Media shareholders owning 50.5 percent of the company and Gannett shareholders owning 49.5 percent.
The newly formed company will operate under the name of Gannett, which is the larger of the two companies. The company's headquarters will remain at Gannett's location near Washington, D.C.
"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," New Media Chairman and CEO Michael Reed said.
The companies estimated they will save between $275 million and $300 million in annual costs within 24 months of the merger, USA Today reported.
GateHouse operates 130 daily newspapers, including the Austin American-Statesman in Texas, The Palm Beach Post in Florida and the Akron Beacon Journal in Ohio. Gannett has more than 160 publications, including the El Paso Times in Texas, the Detroit Free Press, the Arizona Republic and The Des Moines Register in Iowa.