Reports: Gannett, Gatehouse Media Talking Merger

USA Today publisher Gannett Co. has recently held merger talks with GateHouse Media, according to The Wall Street Journal citing people familiar with the matter, a possible deal that would bring together the nation’s two largest newspaper groups by circulation.

Gannett—which two weeks ago defeated Digital First Media in a proxy fight and fended off the hedge-fund backed publisher’s hostile takeover bid—has also been speaking recently with others about potential deals, including Tribune Publishing Co. and McClatchy Co., the people said.

All the companies have struggled over the past decade with steep advertising and print readership declines. This year, both GateHouse and Gannett have had substantial rounds of layoffs, while McClatchy offered buyouts to hundreds of employees.

A tie-up could help the companies bulk up and trim costs to better weather the brutal environment for local newspapers around the country. A merger would give Gannett a far wider geographic footprint to sell digital advertising through its USA Today network and help speed the companies’ reorientation away from print.

Should GateHouse and Gannett reach a deal, the combined company would be the largest U.S. publisher by number of titles and circulation. GateHouse is currently the largest newspaper publisher in the U.S. by number of titles owned, with 156 daily papers and 464 weeklies, most of which are in very small markets. GateHouse also is second in circulation among newspaper publishers in the U.S., behind Gannett.

It isn’t clear how a potential GateHouse-Gannett combination would be structured, and there is no guarantee there will be any deal.

Gannett owns 109 daily newspapers including the Arizona Republic, Milwaukee Journal Sentinel and the Indianapolis Star.

GateHouse has spent close to $1 billion in recent years acquiring dozens of small and medium-size papers around the country. Last year, it bought the Austin American-Statesman, the Palm Beach Post and the Akron Beacon Journal.