Billionaire Warren Buffett's holding company unveiled plans Thursday to pour millions into a chain of small newspapers, saying they represent "an important institution" for communities.
A subsidiary of Buffett's Berkshire Hathaway, BH Media Group, will purchase all of the newspapers owned by Media General, with the exception of the Tampa group, for $142 million in cash, a statement said.
Media General said it is in discussions with other prospective buyers for the Tampa unit.
Berkshire Hathaway will also provide Media General with a $400 million loan and a $45 million revolving credit line, to pay off existing debt.
The newspapers being purchased by BH Media Group include 63 daily and weekly titles in Virginia, North Carolina, South Carolina and Alabama, in addition to digital assets, including websites and mobile and tablet applications.
"In towns and cities where there is a strong sense of community, there is no more important institution than the local paper," said Warren Buffett, chairman of Berkshire Hathaway.
"The many locales served by the newspapers we are acquiring fall firmly in this mould and we are delighted they have found a permanent home with Berkshire Hathaway."
Buffett, whose choices are often followed by the investment community, made the decision at a time when traditional newspapers are struggling with the move to digital media. He also has a stake in the Washington Post and other media.
The Media General newspapers will be part of BH Media Group, along with the Omaha World-Herald Company newspapers.
Marshall Morton, president and chief executive officer of Media General, said, "Selling our newspapers represents a monumental change for us. We're very happy that our newspapers will become part of Berkshire Hathaway's BH Media Group, a company with a strong commitment to local news leadership and community engagement."
The newspaper transaction is expected to close on June 25. A transition will take place over several months, in coordination with Media General personnel.
Source: AFP Global Edition