Newspaper article THE JOURNAL RECORD

Gannett to Buy Central Newspapers for $2.6 Billion

Newspaper article THE JOURNAL RECORD

Gannett to Buy Central Newspapers for $2.6 Billion

Article excerpt

PHOENIX (AP) -- Gannett Co., the publisher of USA Today and the nation's largest newspaper group, struck a deal Wednesday to buy Central Newspapers Inc. -- owner of The Arizona Republic, The Indianapolis Star and four other dailies -- for $2.6 billion.

The sale would end a family journalism dynasty that began with Eugene C. Pulliam, a preacher's son who began delivering newspapers at age 6 and eventually owned dozens of papers. His heirs hold a controlling interest in Phoenix-based Central Newspapers.

The sale is the latest in a wave of mergers, sales and alliances that are transforming the industry as newspapers look for ways to remain profitable in the Internet era. And it continues a recent buying spree by Gannett. In a deal announced after the close of trading, Gannett agreed to pay $64 a share for Central Newspapers stock.

There had been widespread speculation about the sale, and Central stock slipped 12.5 cents to close at $64.25 a share on the New York Stock Exchange. Gannett gained 81.3 cents to close at $58.938 on the NYSE.

It was the second major purchase this month by Gannett. It earlier reached an agreement to buy 21 Thomson Corp. newspapers in Louisiana, Maryland, Ohio, Wisconsin and Utah for $1.125 billion.

Before the latest acquisitions, Gannett owned 74 daily newspapers in the United States. It also operates 22 TV stations. The company earned $886.6 million last year on revenue of $5.26 billion.

Central Newspapers earned $98.3 million on revenue of $804.1 million last year.

The centerpieces of the sale are The Arizona Republic and The Indianapolis Star, both of which dominate their markets.

The Republic, Arizona's largest newspaper, has an average circulation of 433,000 on weekdays, 475,000 on Saturday and 558,000 on Sunday in the fast-growing Phoenix area and around the state, according to the Audit Bureau of Circulation. …

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