Express & Echo and Western Morning News are sold

The owners of the Express & Echo and Western Morning News have sold the newspapers as part of a £50m deal.

Daily Mail & General Trust has struck an agreement with Local World, a newly-formed media group that will combine the Devon titles  and more than 100 others with those of Iliffe News & Media Limited.

DMGT will receive consideration of £52.5m in cash and a 38.7% shareholding in Local World, which will allow DMGT to benefit from the potential upside from the evolution of the regional newspaper industry.

The Iliffe family, owners of Yattendon Group, will have a 21.3% shareholding in the new business. Trinity Mirror will have a 20% shareholding in Local World. The remaining Local World shares will be purchased by other investors, including Artefact Group, an Investment Fund associated with Lord Ashcroft, and Odey Asset Management.

Local World will become one of the UK's leading regional newspaper publishers, online content providers and local advertising platforms, with more than 107 print titles and 60 websites. DMGT will contribute more than 80 titles to the new venture, with another 36 coming from Iliffe News & Media.

Local World, with a combined weekly newspaper audience of 6 million readers and 7 million online users, aims to revitalise local media by offering fully integrated print and digital media services that focus on relevant content, advertising and local services across the UK.

Steve Auckland, currently Chief Executive of Northcliffe, will become CEO of Local World. Rachel Addison, Group Finance Director of Northcliffe, will assume the same role at the new company alongside a board of directors drawn from the main shareholders. The company will be chaired by former Daily Mirror chief executive David Montgomery.

Mr Auckalnd was quoted as saying on the DMGT website: "Local World will be a comprehensive local content provider, offering the best and most trusted source of news, views and advertising in print, online and mobile, to its local audiences in the UK. The new company will be well-resourced, entrepreneurial, and able to respond quickly to the differing requirements of local communities."

Martin Morgan, Chief Executive of DMGT, said: "This is good news for DMGT, for all who work at Northcliffe and for the future of local news media. With this move we receive cash from the sale and also retain a stake in a business with excellent prospects. Local World has talented people and a clear vision for the future of local media. I think the media industry has been waiting for this logical next step for regional newspapers."

In a letter to employees this morning, Lord Rothermere, the owner of DMGT, said: "For everyone who works at Northcliffe, we believe Local World, with DMGT as its largest shareholder and led by Steve Auckland as Chief Executive, will be a good guardian of these assets. It is acquiring this business to expand it. The new company will also seize new opportunities in the fast-growing world of digital information".