Knight-Ridder, the uber newspaper jugarnaut recently put on the sales block, has been bought by smaller rival McClatchy for around $4.5 billion.

McClatchy, the California-based owner of the Sacramento Bee and the Star Tribune, has agreed to buy its larger and better-known rival Knight Ridder for $4.5bn, in a move that will make it the second-largest US newspaper group with 32 daily titles.

The deal, approved by the Knight Ridder board late on Sunday, will see the break-up of the group formed by the merger of the Knight and Ridder family companies in 1974 and whose origins date back to the 1890s.

McClatchy, started during the California gold rush by an Irish immigrant and still controlled by his descendents, will keep 20 Knight Ridder newspapers. It put 12 others on the market yesterday, including some of its best-known titles such as the Philadelphia Inquirer and the San Jose Mercury News.

The WSJ recently posted an article stating that newspapers in well developed markets have been losing marketshare quicker than papers in smaller communities, and there have been talks of some papers going web only or closing shop.

While some media companies are trying to buy their way into the web there is not a lot that fits the old inefficient models and many valuable sites are stuck using legacy systems. Many established well trusted yet inefficient traditional publishing businesses will end up being sold to more efficient web based outfits in the coming year.