Jeff Bezos Pulls A Buffett And Buys The Washington Post For $250 Million, Further Consolidation Ahead

Amazon AMZN CEO and Founder Jeff Bezos announced after the close Wednesday that he is set to purchase the print newspaper business of the Washington Post WPO for $250 million in cash. The move is just the latest round of sales in the print news industry as sales and profits have shrunk with the rise of digital news outlets.

Deal Terms

Bezos personally, not in any capacity with Amazon, purchased the print business for $250 million cash, subject to normal working capital adjustments, payable at the end of the year. Allen and Co. advised on the deal.

As part of the deal, Bezos will acquire he 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. The Washington Post company will rename itself and will retain publications including Slate magazine, TheRoot.com and Foreign Policy.

Critical Publication

“I understand the critical role the Post plays in Washington, DC and our nation, and the Post's values will not change,” said Mr. Bezos. “Our duty to readers will continue to be the heart of the Post, and I am very optimistic about the future.”

Mr. Bezos has asked Katharine Weymouth, CEO and Publisher of The Washington Post, Stephen P. Hills, President and General Manager, Martin Baron, Executive Editor, and Fred Hiatt, Editor of the Editorial Page to continue in those roles.

“Everyone at the Post Company and everyone in our family has always been proud of The Washington Post — of the newspaper we publish and of the people who write and produce it,” said Donald E. Graham, Chairman and CEO of The Washington Post Company. “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 (after a transaction that would be in the best interest of our shareholders). 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.”

“With Mr. Bezos as our owner, this is the beginning of an exciting new era,” said Ms. Weymouth. “I am honored to continue as CEO and Publisher. I have asked the entire senior management team at all of the businesses being sold to continue in their roles as well.”

Newspaper Industry Change

Bezos follows Berkshire Hathaway BRK BRK CEO Warren Buffett in buying local newspapers, however Bezos' purchase is well larger than any that Buffett has made. As of March, Buffett had spent $344 million on 28 local newspapers. Notably, however, Berkshire was the largest shareholder in the Washington Post, owning 27.86 percent of the company.

For both of the iconic businessmen, the newspapers are a small portion of their respective wealth. However, these moves and also moves by John W. Henry, Chairman of Fenway Sports Group, purchasing the Boston Globe from the New York Times NYT confirm that further consolidation is ahead in the newspaper industry.

Shares Higher

Washington Post shares rose 5.15 percent pre-market to $598.00.