Officials of Gannett Co. and Combined Communications Corp. yesterday told Wall Street analysts they expected their announced merger to clear regulatory and antitrust hurdles, though this may take some time.
The merger, which involves a $370 million exhange of stock, is the largest ever proposed between firms in the newspaper business. It drew immediate fire from Rep. Morris Udall (D-Ariz), who said he is worried by "the implications of concentrated communications power."
The Justice Department also quickly said its Antitrust Division will take a preliminary look at the proposed merger as it routinely does for transactions of this magnitude.
"We welcome and expect that the Justice Department will look at this, because that's their job," said Gannett's president and chief executive officer, Allen Neuharth. But he added that "it is our judgement that this is no violation of the antitrust laws."
Neuharth, who called the deal "a marriage made in heaven," noted that the two companies have "totally different products in entirely different markets."
Gannett is now mainly in the newspaper business and had 77 papers in 30 states, and a few subsidiary broadcast properties. Combined Communications owns two major dailies - the Cincinnati Enguirer and the Oakland Tribine - but is mainly in the broadcasting and outdoor advertising business. The papers of the two companies do not overlap geographic territory.
Answering reporters questions after the analysts session, Neuharth said Gannett is "very careful not to move into areas where we already have properties," but said he knew of no current policy of sentiment in Congress that would preclude it from expanding in states where it has no presence.
Combined communications President Karl Eller observed that the merged company, though approaching $80 million in annual revenues, would still have less than 2 percent of the $44 billion U.S. advertising market.
Meanwhile, Gannett Chairman Paul Miller told the analysts that the pending merger will not dampen his company's zest for further acquisitions. And he forecast that the chain would reach 100 newspapers in the foreseeable future.
"We see no end to our continued growth," said Miller. Gannett has added 24 papers in the last tow years, 20 in 1977 alone when it acquired the Speidel chain.