California publishing firm will buy Knight Ridder

NEW YORK (AP) — Newspaper publishing company McClatchy Co. will buy Knight Ridder Inc., the second-largest newspaper company in the country, for about $4.5 billion in cash and stock, The New York Times reported Sunday night. Knight Ridder had been forced to put itself up for sale by its largest shareholders, who were frustrated with its stock performance.

The Times, citing unidentified people involved in the negotiations, said Knight Ridder agreed Sunday night to the deal, which was expected to be announced Monday.

McClatchy is based in Sacramento, Calif., where it publishes The Sacramento Bee and 11 other newspapers, including The Fresno Bee and The News & Observer in Raleigh, N.C.

Knight Ridder, based in San Jose, Calif., has 32 daily newspapers, including The Miami Herald and the San Jose Mercury News.

McClatchy has punched above its weight before, sealing a $1.4 billion deal in 1997 to acquire the Cowles Media Co., the parent company of the Star Tribune in Minneapolis. This deal, however, represents a much bigger bite for the company and its highly regarded chief executive, Gary Pruitt.

While McClatchy is smaller than Knight Ridder, it has a strong balance sheet and is admired for both its business acumen as well as its commitment to quality journalism.