The Washington Post Co. will sell its newspaper publishing business, including the Washington Post newspaper, to Amazon CEO Jeff Bezos.
Bezos will buy the Post for $250 million in an individual capacity and not through Amazon.com.
“I, along with Katharine Weymouth and our board of directors, decided to sell only after years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post,” Donald Graham, The Washington Post Co. CEO said. “Jeff Bezos’ proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post.”
Bezos said, “I understand the critical role the Post plays in Washington, DC and our nation, and the Post’s values will not change. Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.”
The transaction covers The Washington Post and other publishing businesses, including the Express newspaper, The Gazette Newspapers, Southern Maryland Newspapers, Fairfax County Times, El Tiempo Latino and Greater Washington Publishing.
Bezos also asked the Post’s CEO and publisher Katharine Weymouth and other executives to continue in their roles.
“With Mr. Bezos as our owner, this is the beginning of an exciting new era,” said Weymouth in a press release. “I have asked the entire senior management team at all of the businesses being sold to continue in their roles as well.”
The deal does not include Slate magazine, TheRoot.com or Foreign Policy.
The Washington Post Company, which also owns education testing business Kaplan, will be changing its name within 60 days of completing the transaction, according to an SEC filing.
Buffett’s Berkshire a big shareholder
Warren Buffett’s Berkshire Hathaway has a big stake in the Washington Post Co. As of June 30, Berkshire owned more than 1.7 million shares, worth almost $1 billion. That’s almost one-quarter of the shares outstanding.
The Washington Post Co. has a market cap of $4.2 billion.
Buffett has a long-standing connection to the Post, including a friendship with then-publisher Katherine Graham that started in the 1970s.
He started serving on the company’s board in 1974, just after Berkshire bought its stake.
Buffett reluctantly retired from the board in 2011, after what he called a “great 37 years.”
At the time he said, “I’ve loved The Washington Post since I delivered almost 500,000 copies of it as a youth in Washington. That love for the product, the Company and the management continues unabated today.”
Buffett told the Wall Street Journal that he would “never sell a share” of the Post because it has “all kinds of meaning to me.”
A Berkshire spokesman said Buffett did not immediately have a comment about the Bezos sale.
Even though he once said the newspaper industry has a “terrible” future, Berkshire has been buying community-oriented newspapers in small to medium-sized cities, including the Omaha World-Herald in his home town. Buffett believes their monopoly on local news and information will allow them to compete effectively with Internet-based news sources.
At this year’s Berkshire shareholders meeting in May, Buffett told CNBC that he doesn’t expect to “move the needle” at Berkshire with its newspaper buys but he does think they’ll generate an annual return of 10 percent, so “we’re not doing anything dumb.”