Berkshire-Hathaway Finalizes Acquisition of Buffett's Hometown Paper
Berkshire-Hathaway this week finalized a deal in which it acquired the Omaha World-Herald, CEO Warren Buffett's hometown newspaper. The deal, announced November 30th, entailed Buffett's conglomerate paying $150 million in cash and assuming another $50 million in debt, and brought to an end one of the newspaper industry's last remaining employee-ownership plans. According to a spokesman for the paper, about 275 current and former employees, the company's shareholders, approved the buyout by an overwhelming margin earlier this month. The actual amount the employees got for their privately held shares was not disclosed.
Under the agreement, Berkshire will take control of the World-Herald and its subsidiary newspapers. These include daily newspapers in the Nebraska towns of Kearney, North Platte, Scottsbluff, York and Grand Island; in addition to a Council Bluff, Iowa paper, several weekly papers in the region, and World Marketing, a direct-mail advertiser with offices in Atlanta, Chicago, Dallas, Omaha and Los Angeles. Prior to the acquisition, Buffett had vowed to avoid investments in newspapers because of the industry's declining profits over the last few years.
Before buying his hometown paper, Buffett's Berkshire Hathaway did own a newspaper in Buffalo and held a sizable stake in the Washington Post's parent company, one of the biggest newspaper publishers in the world. During a meeting with World-Herald shareholders, Buffett was asked about his comments about the newspaper industry, and assured shareholders he wouldn't be buying the company if he thought the industry was doomed.