USA Today owner Gannett Co. is nearing a deal to buy Journal Media Group, owner of the Milwaukee Journal Sentinel and other newspapers, in a sign a long-awaited round of consolidation in the beleaguered industry may be under way.

The deal could be announced as early as Thursday and value Journal Media at just under $300 million, according to people familiar with the matter. Journal Media had a market value of $192 million at Wednesday's close, meaning Gannett would be paying a relatively big takeover premium. Gannett had a value of $1.7 billion.

The deal would add Journal Media publications—which include a handful of dailies besides the Journal Sentinel as well as dozens of community papers throughout the Midwest and South—to Gannett's network of 92 mostly small- and medium-market daily newspapers in the U.S.

Journal Media was created this year from a complex deal that combined the newspaper assets of E.W. Scripps and Journal Communications. Its other titles include the Memphis Commercial Appeal, the Knoxville News Sentinel and the Naples Daily News.

Shares of Journal Media are down 19% since their inception.

Gannett itself is fresh off its June spinoff as a pure newspaper company. The company, with its television assets now in a separately traded public company called Tegna Inc., has a new chief executive, Robert Dickey, who has said the company is on the hunt to acquire newspapers in markets that have populations between one and three million people. He added that it also would consider smaller markets of more than 500,000 people—but only as a purchase of a larger media group. Milwaukee, the largest market in which that Journal Media Group operates, has a population of 600,000.

Since the split, Gannett took control of some additional newspapers in Texas, New Mexico and Pennsylvania as part of an asset swap with Digital First Media, and it acquired 28 weekly and a daily newspaper in the U.K.

The deal would represent one of the first major acquisitions of the newspaper assets that were jettisoned in the past few years amid a wave of spinoffs that sought to free the faster-growing television businesses of diversified media companies from the steady decline of advertising and other woes that print operations are suffering.

In the immediate aftermath of the splits, most of the deal-making has been done on the television side, as broadcast-station owners look to bulk up to negotiate higher fees from pay-TV operators and content providers.

But slowly, over the past year, consolidation has come to the newspaper industry as well in part because prices for newspaper assets have fallen so precipitously and because of the cost and other synergies that such combinations promise.

New players like Gannett and New Media Investment Group—launched in 2013 with assets of GateHouse Media Inc. and the Dow Jones Local Media Group—are snapping up newspaper assets they see as undervalued. New Media, for example, agreed to buy Stephens Media LLC, owner of 65 weekly and niche publications including the Las Vegas Review-Journal, for $102.5 million and Halifax Media Group, owner of 36 newspapers including the Tuscaloosa News, for $280 million.

Write to Dana Cimilluca at dana.cimilluca@wsj.com and Keach Hagey at keach.hagey@wsj.com

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(END) Dow Jones Newswires

October 07, 2015 18:35 ET (22:35 GMT)

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