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updated 11/30/2011 1:00:30 PM ET 2011-11-30T18:00:30

Warren Buffett's Berkshire Hathaway said Wednesday that it is buying the Omaha World-Herald Co. and expanding the firm's newspaper holdings despite Buffett's misgivings about the industry.

Berkshire said that it had agreed to buy Buffett's hometown newspaper. Terms of the deal, which must be approved by the Omaha World-Herald's employee owners and other shareholders, weren't disclosed.

The deal also includes daily newspapers the Omaha World-Herald owns in Council Bluffs, Iowa, and Grand Island, York, Kearney, North Platte and Scottsbluff in Nebraska.

Buffett did not immediately respond to an interview request on Wednesday. Previously Berkshire's chairman and chief executive has said that he would be unlikely to add to Berkshire's newspaper investments because of the industry's dwindling returns. Berkshire owns the Buffalo News and it has a sizable investment in the Washington Post Co.

Buffett told Berkshire shareholders two years ago that most newspapers face the possibility of unending losses because the industry has lost its essential nature.

"They were only essential to advertisers as long as they were essential to the reader, and that is changing," Buffett said.

In a statement Wednesday, Buffett suggested that the World-Herald Co. is in better shape than most newspapers.

"The World-Herald delivers solid profits and is one of the best-run newspapers in America, and we are pleased to have Terry Kroeger and his team join Berkshire Hathaway," Buffett said

Kroeger, who is the World-Herald's CEO, said this deal will help the newspaper raise needed capital. He said the company's employee-ownership structure was restrictive and forced the World-Herald to repurchase stock from departing employees.

"We have repurchased the Company about seven times since the employee ownership plan was put in place," Kroeger said.

Berkshire owns more than 80 subsidiaries, including clothing, insurance, furniture, utility, jewelry and corporate jet companies. Berkshire also has big investments in companies including Coca-Cola Co. and Wells Fargo & Co.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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