THE board of Gannett UK Limited ("Gannett"), the parent company of Newsquest, owners of the Worcester Evening News, has announced that it has entered into an agreement (the "Agreement") with SMG plc for the acquisition of its publishing business ("SMG Publishing") for £216m (the "Acquisition").

SMG Publishing consists of three Scottish regional newspapers: The Herald, Sunday Herald and Evening Times; 11 specialist consumer and business to business magazine titles; and an online advertising and content business.

The Acquisition is subject to the approval of the Secretary of State for Trade and Industry pursuant to section 58(1) of the Fair Trading Act 1973. The Department of Trade and Industry announced on 10 December, 2002 that Gannett's application to acquire SMG Publishing under the special mergers regime had been referred to the Competition Commission, which is expected to report by March 10, 2003.

The acquisition of SMG Publishing increases Gannett's strategic focus in the regional publishing sector. The UK Directors of Gannett believe the acquisition offers opportunities for enhanced growth and the sharing of best practices of both companies.

Announcing the Agreement, Douglas H McCorkindale, Chairman, President and CEO of Gannett Co., Inc. said, "We are delighted that SMG Publishing will become part of Gannett. These publications will extend our portfolio to Scotland for the first time and offer enhanced opportunities for growth."

Paul Davidson, Chief Executive of Newsquest said, "SMG Publishing's prestigious titles will make an excellent combination with our existing newspaper, printing, magazine and related internet sites.

"The management and employees of SMG Publishing share our commitment to provide quality editorial products to both readers and advertisers in the communities we serve."