Berkshire completes deal to buy Omaha World-Herald
Monday, December 26, 2011
OMAHA, Neb. (AP) — Berkshire Hathaway Inc. has completed the purchase of company chairman Warren Buffett's hometown newspaper, the Omaha World-Herald.
The deal announced Nov. 30, for $150 million and the assumption of $50 million in debt, ended one of the newspaper industry's last sizable employee-ownership plans.
World-Herald spokesman Joel Long said Monday that the deal closed Friday. World-Herald shareholders — about 275 employees and retirees and the Peter Kiewit Foundation — approved the sale by an overwhelming vote, Long said. The amount employees received for each of their shares, which are not publicly traded, wasn't disclosed.
Under the agreement, Berkshire acquires the flagship World-Herald and daily newspapers in Kearney, Grand Island, York, North Platte and Scottsbluff in Nebraska; the Council Bluffs Nonpareil in Iowa; a number of weekly newspapers in the region; and World Marketing, a direct-mail company with operations in Omaha, Chicago, Dallas, Atlanta and Los Angeles.
Buffett, who is Berkshire's chairman and chief executive, had said he probably wouldn't increase Berkshire's newspaper holdings because of the industry's dwindling returns. Berkshire owns the Buffalo News and it has a sizable investment in the Washington Post Co.
But during a meeting with World-Herald shareholders, he said: "I wouldn't do this if I thought this was doomed to some sort of extinction."
The Omaha World-Herald Co. has about 1,600 employees, including about 650 at the flagship newspaper in Omaha. Its daily circulation is just over 135,000 and a Sunday circulation of a little over 170,000.
World-Herald CEO Terry Kroeger said when the deal was announced that the company's employee-ownership structure was restrictive and had forced the newspaper to repurchase stock from departing employees.
Buffett promised to stay out of editorial decisions at the World-Herald Co.'s newspapers. Berkshire Hathaway usually doesn't make major changes at the companies it buys. Instead, Buffett likes buying well-run companies, allowing them to continue operating in their fashion.
When the deal was announced, Buffett said the World-Herald "delivers solid profits and is one of the best-run newspapers in America."
Berkshire owns more than 80 subsidiaries, including clothing, insurance, furniture, utility, jewelry and corporate jet companies. It also has big investments in companies including Coca-Cola Co. and Wells Fargo & Co.