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McClatchy to buy Knight Ridder for $4.5 billion

NEW YORK - The McClatchy Co. has reached a deal to buy Knight Ridder Inc., the second-largest U.S. newspaper publisher, for about $4.5 billion in cash and stock, the companies announced Monday. McClatchy will also assume about $2 billion in Knight Ridder's debt.

The deal will add several major newspapers to McClatchy's portfolio, including The Miami Herald, The Kansas City Star and the Fort Worth Star-Telegram. McClatchy's papers include The Sacramento Bee and The News & Observer in Raleigh, N.C.

At the same time, McClatchy plans to sell 12 of Knight Ridder's 32 newspapers, including The Philadelphia Inquirer, the Philadelphia Daily News and the San Jose Mercury News, saying that those papers don't fit the company's longstanding criteria of buying newspapers in growing markets.

One of the papers being sold is the St. Paul Pioneer Press in Minnesota where the company would have faced antitrust concerns because it also owns the Star Tribune in the adjacent city of Minneapolis.

The transaction, which had been expected, largely ends several months of uncertainty for Knight Ridder, which had been forced to explore a sale by its largest investors, who were frustrated with the company's stock performance.