Warren Buffett's Berkshire Hathaway Inc. agreed to sell its newspaper business to Lee Enterprises Inc. for $140 million in cash, abandoning an industry the billionaire investor had long defended even as its financial prospects deteriorated.
The transaction includes 30 daily newspapers and several dozen weeklies owned by BH Media Group, including the Omaha World-Herald in Berkshire's hometown in Nebraska, as well as the Buffalo News, a western New York newspaper Berkshire bought in 1977.
Lee's papers include the St. Louis Post-Dispatch. Since July 2018 the company had been managing Berkshire's newspapers other than the Buffalo News, including the Richmond Times-Dispatch in Virginia and Tulsa World in Oklahoma.
It will have 81 daily newspapers, up from 50, after the sale, which is expected to close in mid-March.
As part of the transaction, Berkshire will also become Lee's sole lender, refinancing the Davenport, Iowa-based company's existing debt and lending $576 million at a 9% interest rate. A closing is expected in the middle of March.
Newspapers represented only a small part of Berkshire, which has more than 90 operating businesses such as the BNSF railroad and Geico auto insurer, and bought most of its newspaper holdings in the last decade.
It nonetheless remains unusual for Buffett, who delivered newspapers as a teenager, to sell an entire operating business.
Buffett tells shareholders on Berkshire's website that he has "no interest at all" in selling good businesses, and is "very reluctant to sell sub-par businesses" if they are expected to generate cash, be run well and have good labor relations.
But he has long lamented the newspaper industry's decline, as the rise of the Internet and proliferation of news resources deprived traditional newspapers of revenue streams.
Last April, Buffett told Yahoo Finance the industry was "toast," and told Berkshire shareholders in May 2018 that only the Wall Street Journal, the New York Times and perhaps the Washington Post had digital models strong enough to offset declines in print circulation and ad revenue.
Berkshire did not immediately respond to a request for comment.
The industry decline has not spared the World-Herald, which has eliminated dozens of jobs, including nearly all its business reporters. It once covered Berkshire frequently, but no longer.
In a statement, Buffett said Berkshire had "zero interest" in selling to anyone other than Lee.
"No organization is more committed to serving the vital role of high-quality local news, however delivered, as Lee," he said.
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