Billionaire investor Warren Buffet yesterday agreed to buy 63 newspapers from Media General, for $142 million, adding more newspapers to his portfolio that includes a large stake in Washington Post Co.

Two years ago, Buffett, a former newspaper delivery boy, told Berkshire Hathaway shareholders that most US newspapers could face unending losses and that he would not think of buying most of them.

Although most analysts do not see long-term value of the print media, Buffett has now reversed his opinion and has defended newspapers, saying that they will have a decent future if they continue delivering information that cannot be found elsewhere.

"In towns and cities where there is a strong sense of community, there is no more important institution than the local paper," Buffett said in a statement. "The many locales served by the newspapers we are acquiring fall firmly in this mould and we are delighted they have found a permanent home with Berkshire Hathaway."

Buffet's investment arm Berkshire Hathaway Inc will buy 63 newspapers from Media General including the Winston-Salem Journal, Eden News, The Reidsville Review and the Danville (Va.) Register & Bee.

The deal does not include the Tampa Tribune of Florida and smaller newspapers in that market, which Media General is already in talks to sell to other buyers.

Berkshire Hathaway will also extend a $400 million term loan with an interest rate of 10.5 per cent to Richmond, Virginia-based Media General and take a 19.9 per cent stake in the company. Berkshire Hathaway will provide a $45 million revolving credit line to the struggling company..

The acquired newspapers will be combined with Buffet's Omaha World-Herald Co. into a new Berkshire Hathaway division called BH Media Group and managed by World Media Enterprises, a new sister company of The World-Herald.

The acquisition comes after Buffett late last year acquired the World-Herald Co, publisher of his hometown newspaper , for a reported $150 million. (See: Warren Buffett acquires hometown newspaper for $150 million)

Buffett is also the largest shareholder in Washington Post with a 23-per cent stake, owns the Buffalo News, and a small stake in the recently reorganised newspaper chain Lee Enterprises.

Post sale, the remaining assets of Media General will include 18 network-affiliated television stations and their associated websites. Media General owns eight NBC affiliates, eight CBS, one ABC and one CW.  Six of its stations operate in the Top 40 markets in the US, including WFLA-TV in Tampa, Florida.

Media General's stations reach more than one-third of TV households in the Southeast and more than 8 percent of US TV households.