Warren Buffett says goodbye to part of his empire

Warren Buffet announced today that he will sell his media collection to Lee

Warren Buffet announced today that he will sell his media collection to Lee

Lee Enterprises (NYSE:LEE) will acquire Berkshire Hathaway's (NYSE:BRK.B) (NYSE:BRK.A) BH Media Group's publications and The Buffalo News for $140M in cash.

The $140 million deal includes 31 local daily newspapers in 10 states, as well as The Buffalo News in NY, which is separately owned by Berkshire Hathaway. The Warren Buffet-owned BH purchased the DP - along with it's 9 other newspapers in Virginia including the Richmond Times Dispatch, Waynesboro's The News Virginian, Roanoke Times, Lynchburg News-Advance 8 years ago from Media General.

Newspapers make up a small part of Berkshire Hathaway, which owns an assortment of more than 90 companies and holds major investments in companies like Coca-Cola Co., Apple and Wells Fargo.

Buffett, who delivered newspapers as a teenager, has long lamented the decline of the industry, telling Berkshire shareholders in May 2018 that only the Wall Street Journal, the New York Times and perhaps the Washington Post had found digital models strong enough to offset declining print ad revenue. The newspaper deal, however, is Berkshire's second divestiture in less than a year, including the sale of an insurance business in late 2019.

Lee said the transaction would be immediately accretive to earnings. Lee has managed BHMG's publications since July 2018 under a management agreement.

"It both refinances our long-term debt on attractive terms and provides new revenue opportunities as well as operational synergies across an expanded portfolio". The proceeds from Berkshire's financing will be used to pay for the acquisition and refinance Lee's approximately $400 million of existing debt.

Buffett, Berkshire's chairman and CEO, said he and his partner, Charlie Munger, have long admired Lee. Berkshire will be Lee's sole lender after the deal closes.

The deal means Lee, now in 50 markets, will own 81 newspapers, nearly doubling its size.

Buffett, who got a job delivering papers as a teenager and invested in the industry to capitalise on its one-time local advertising stronghold, lamented past year that most newspapers are "toast".

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