The sale of GMG Regional Media includes just £7.4m in cash, with a further £37.4m to buy it out of a printing deal with Trinity Mirror.
The struggling division has been rocked by the advertising crash. In 2008 it reported a profit of just £500,000, down from £14.3m the year before. It is set to post substantial losses for 2009.
GMG publishes 32 regional newspapers; 22 titles in the north-west and 10 in the south. Mark Dodson, the chief executive of GMG Regional Media, and Ruth Spratt, the managing director of MEN Media, will leave the company.
The deal did not include selling GMG’s Greater Manchester TV station Channel M, which Trinity Mirror did not want, or its local newspapers in Woking.
Guardian News and Media, GMG’s national newspaper wing, is losing £100,000 a day and shedding jobs. GMG lost £89.8m in the year to March last year, despite selling a 49.9 per cent stake in Trader Media Group.
GMG is wholly owned by the Scott Trust, which exists to secure the future of the Guardian “in perpetuity”. The sale of the regional division to Trinity Mirror was made possible by recently relaxed newspaper competition laws in the UK.
Carolyn McCall, chief executive of Guardian Media Group, said: “GMG is mandated to secure the future of the Guardian in perpetuity, and we have a strong portfolio which has to be in the right shape to achieve that goal. The Group board and the Scott Trust have made the decision to sell in light of these strategic objectives.”