New Media Investment Group Inc. has agreed to acquire Gannett Co. Inc. in a deal valued at $1.38 billion.

Both New Media and its operating subsidiary, GateHouse, will be rebranded and operate under the Gannett name. The combined company will be headquartered in McLean, Virginia with a continued corporate presence in existing locations.

Upon closing, the deal would create the nation’s largest newspaper chain, forming a company that would own 263 daily newspapers across 47 states and Guam, as well as USA Today. Among the newspapers affected are the Akron Beacon Journal, the Canton Repository and the Columbus Dispatch in Ohio, each owned by GateHouse, and the Detroit Free Press in Michigan, which is a Gannett-owned property.

The deal is expected to accelerate the combined company’s digital transformation and create cost savings of $275 million to $300 million annually. The company also plans to continue to invest in its newsrooms, according to a news release.

Under the terms of the agreement, shareholders of Gannett will receive $6.25 in cash and 0.5427 of a New Media share for each Gannett share they hold, representing total consideration of $12.06 per Gannett common share based on New Media’s closing stock price as of August 2, and a premium of approximately 18% to the five-day volume-weighted average price of Gannett shares as of that date. After the close of the transaction, Gannett shareholders will hold approximately 49.5% of the combined company and New Media shareholders will hold approximately 50.5%.

New Media and Gannett reported more than $4.4 billion in combined revenue for fiscal year 2018.

The new company’s management team will be led by New Media’s current chairman and CEO, Michael Reed. Alison Engel, Gannett’s current CFO, is expected to serve as the CFO of the combined organization upon closing. Gannett’s newly appointed CEO, Paul Bascobert, will become CEO of the combined company’s operating subsidiary. The rest of the combined company’s senior executive team, which is expected to be composed of highly experienced leaders from both companies, will be announced at a later date.

The deal is expected to close by the end of 2019, subject to the satisfaction of customary closing conditions, including receipt of regulatory clearances and approval by the shareholders of each company.