By Lukas I. Alpert and Cara Lombardo
USA Today publisher Gannett Co. has recently held merger talks with GateHouse Media, according to people familiar with the matter, a possible deal that would bring together the nation’s two largest newspaper groups by circulation.
Gannett /zigman2/quotes/202050177/composite GCI -6.49% —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. /zigman2/quotes/206467255/composite TPCO -1.40% 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.
Also popular on WSJ.com: