Business & Finance
In one of the biggest newspaper industry shakeups in years, Gannett Co., Knight Ridder Inc., and the privately held MediaNews Group completed deals Wednesday that place Detroit's two dailies under new ownership. Knight Ridder sold the Detroit Free Press and the Tallahassee (Fla.) Democrat to Gannett, the largest US newspaper publisher and parent of USA Today. In turn, Gannett sold the Detroit News to MediaNews, which brings the latter's stable to 50 dailies. Terms of the deals weren't disclosed. By early next year, the Detroit News will switch from afternoon to morning delivery, putting it in head-to-head competition with the Free Press for the first time in 16 years. They'll continue to co-publish a Saturday edition, but the Free Press will produce Detroit's only Sunday paper. Meanwhile, Knight Ridder, which sees greater profitability in midsize and smaller dailies, picks up papers in Olympia and Bellingham, Wash., and Boise, Idaho, in exchange for the Tallahassee Democrat.
General Motors Acceptance Corp., the financial services subsidiary of the automaker, agreed Wednesday to sell a 60 percent stake in its commercial mortgage business to a consortium of private investors. Terms of the deal with Kohlberg Kravis Roberts, Five Mile Capital Partners, and Goldman Sachs Capital Partners were not disclosed. GMAC's mortgage business oversees a portfolio worth a reported $250 billion. Last week, GMAC sold $55 billion worth of its auto loan portfolio to Bank of America. The deals are seen by analysts as an effort to acquire stand-alone credit ratings, separate from the financially stressed parent company.
Having been rejected twice in its attempt to buy BPB, the world's largest maker of gypsum drywall, French building materials distributor Saint-Gobain said it would bypass the company's board and appeal directly to investors. Saint-Gobain is offering $6.5 billion, an amount BPB executives say "substantially undervalues" their company. Meanwhile, the Dow Jones financial reporting service, citing Credit Suisse First Boston analysts, said a takeover by Saint-Gobain almost certainly would arouse the concerns of European Union regulators, who could well block it on antitrust grounds.
In another move to turn the corner on one of the most turbulent years in its history, Royal Dutch/Shell announced that Nokia chairman Jorma Ollila will become its next chief executive. He'll assume the post next June when current chief Aad Jacobs retires. Ollila has led the Finnish cellphone manufacturer for 13 years.