Berkshire Hathaway, Warren E. Buffett’s Omaha-based business conglomerate, announced on Wednesday that it would purchase The Omaha World-Herald Company, publisher of Nebraska’s principal daily newspaper, The Omaha World-Herald, and six other daily papers, and owner of World Marketing, a direct-mail company.
Mr. Buffett, Berkshire’s chairman and chief executive, and Terry Kroeger, the chief executive of the newspaper company, announced the deal at a meeting for shareholders where Mr. Buffett made a surprise appearance.
According to a report in The World-Herald, Mr. Buffett is buying the company for $200 million, with Berkshire paying “about $150 million cash” while the newspaper’s $50 million debt will remain with the company.
The deal is expected to be completed by the end of the year, pending approval of the 275 Omaha World-Herald shareholders, including current and retired employees. According to The World-Herald, the vote is scheduled for Dec. 20.
Mr. Buffett, who in the past has expressed reservations about the newspaper industry, said in a statement that The World-Herald “delivers solid profits and is one of the best-run newspapers in America.” He pledged that the paper would continue to have editorial independence despite being owned by a prominent hometown business.
The World-Herald reported that the paper’s management team would remain untouched. Mr. Buffett served for a time on the board of The World-Herald beginning in 1982.
In a statement, Mr. Kroeger said that Mr. Buffett’s offer to purchase the company “presented a unique opportunity to address our long-term capital needs and continue local ownership of The Omaha World-Herald, which is consistent with the legacy left to us by Mr. Kiewit.” Peter Kiewit, the owner of a construction and mining company based in Omaha, purchased the paper in 1962.
After Mr. Kiewit’s death in 1979, employees took ownership of 80 percent of the paper, with the remaining 20 percent being held by the Peter Kiewit Foundation. The paper was founded in 1885 by Gilbert Hitchcock.
According to the Audit Bureau of Circulations, The World-Herald has an average weekday circulation of 135,282.
William Grueskin, dean of academic affairs at the Columbia Journalism School, said in an e-mail that the deal made economic sense for the paper, citing its high penetration rate in its community and the fact that the company’s smaller papers had little competition.
“My sense is that he’s deeply devoted to Omaha as a community — it’s his hometown — and still devoted to the newspaper business,” Mr. Grueskin said of Mr. Buffett. Whether those hometown ties might present conflicts of interest for the paper and Mr. Buffett, Mr. Grueskin said, “It’s hard to see how this is any more a conflict than, say, McClatchy owning The Sacramento Bee.”
Stanford Lipsey, the publisher of The Buffalo News, which has been owned by Berkshire Hathaway since 1977, said Mr. Buffett had never tried to influence the editorial content of the paper. “They run the paper as if somebody else owns it,” Mr. Lipsey said. “Warren’s not a factor at all. He doesn’t get involved.”
The purchase also makes business sense for Mr. Buffett, said Donna Dudney, an associate professor of finance at the University of Nebraska, Lincoln.
Mr. Buffett “looks for companies with a durable competitive advantage,” Ms. Dudney said in an e-mail. “The World-Herald is in the top 10 newspapers in the country in terms of the percentage of subscribing households in its market, and its digital news site dominates the Omaha market.”
In addition to owning The Buffalo News, Berkshire Hathaway is the largest shareholder in The Washington Post, with about 21 percent of the publicly traded shares. In January, Mr. Buffett left the board of The Washington Post Company.