Bloomberg to buy BusinessWeek from McGraw-Hill

NEW YORK (Reuters) - Bloomberg LP will buy BusinessWeek magazine from McGraw-Hill Companies as the news and data provider seeks to reach a wider audience than its traditional clients in financial services.

Bloomberg's announcement on Tuesday comes after several rounds of bids by various parties from private equity and media publishing. Bloomberg was long seen as the most likely winner of the auction.

Bloomberg, controlled by New York City Mayor Michael Bloomberg, provided few details on how much it will pay and whether any BusinessWeek or Bloomberg staff would lose their jobs as a result of the deal.

Bloomberg offered $2 million to $5 million, and agreed to assume BusinessWeek's liabilities, including potential severance payments, according to a report on the magazine's website.

Norman Pearlstine, the former editor-in-chief of Time Warner's Time Inc and former executive at buyout firm Carlyle Group, will become BusinessWeek's chairman. He joined Bloomberg last year and is its chief content officer.

McGraw-Hill put the 80-year-old, money-losing BusinessWeek up for sale in July. The magazine's ad revenue, like that of many other publications, has fallen in recent years as more people get free news online and competition has grown from companies like Bloomberg and its rival Thomson Reuters Corp.

The recession has accelerated BusinessWeek's ad declines.

Bloomberg officials were speaking to their employees about the deal and were not immediately available for comment, a spokeswoman said.

Bloomberg's primary audience is its 300,000 subscribers to its Bloomberg computer terminals. But it also owns a cable television network that competes with CNBC, a New York radio station and the Bloomberg Markets magazine.

It is unclear whether Bloomberg will keep the two magazines separate following the purchase.

"BusinessWeek helps better serve our customers by reaching into the corporate suite and corridors of power in government, where news that affects markets and business is made by CEOs, CFOs, deal lawyers, bankers and government officials who typically are not terminal customers," Daniel Doctoroff, president of Bloomberg LP, said in a statement.

(Reporting by Robert MacMillan. Additional reporting by Yinka Adegoke; Editing by Phil Berlowitz and Carol Bishopric)