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McClatchy buying Knight Ridder

Purchase price expected to be about $4.5 billion

NEW YORK — In a realignment for the newspaper biz, Knight Ridder, the country’s second-largest newspaper chain, has been sold to the McClatchy Co.

Purchase price is expected to be about $4.5 billion, as well as the assumption of about $2 billion in debt. Presumably to alleviate that debt and reduce the purchase price, McClatchy will sell some of the papers.

McClatchy is expected to take control of large Knight Ridder papers like the Miami Herald but will sell off some flagship names like the Philadelphia Inquirer and San Jose Mercury News because they aren’t in growing markets.

McClatchy owns the Sacramento Bee and other papers, many in markets smaller than those in which Knight Ridder has a presence.

Move causes a realignment in an industry which has been hit hard by defection to online news as well as an ad slowdown, which includes a decrease in some studio advertising.

Analysts were buoyed by the fact of the sale but disheartened by the relatively low acquisition price.

McClatchy execs said that they did not expect layoffs at their new papers.

McClatchy shares closed down 2.9% to $51.55 after earlier declining to as low as $49.21. Knight Ridder’s shares fell 1.7% to $63.92.