Murdoch Merges 4 Newspapers Into 2 in Rescue Effort : Australia: Firm’s stock tumbles 40% in a month amid concern over its massive $8.7-billion debt.

Rupert Murdoch’s debt-laden News Corp. said today it will merge its four Sydney and Melbourne newspapers into two 24-hour publications to avoid shutting down its struggling afternoon dailies.

Industry analysts said the move, effective Monday, will likely ease pressure on News Corp., whose stock price has tumbled about 40% in the last month on investor concern about its massive $8.7-billion debt.

The merger of Australia’s best-selling newspaper, the Melbourne Sun, with the city’s struggling afternoon broadsheet the Herald, and Sydney’s tabloids, the morning Daily Telegraph and ailing afternoon Daily Mirror, will mean the loss of about 180 jobs.

“As an alternative to closing either (afternoon) paper, it will save well over 800, probably 1,000 jobs as well as giving the public continuing afternoon newspaper service,” Murdoch said at a news conference in Melbourne.

“I expect the savings to be quite considerable,” he said. “I think it is a business benefit in that it should improve the overall profit of the company.”

Murdoch declined to comment either about the recent plunge in News Corp.’s stock price, which has wiped about $515 million off its market value, or a sharp rise in the group’s short-term debt.

Murdoch said the changes are linked with News’ $830-million investment in high-technology color printing plants in Sydney, Melbourne, Brisbane and Adelaide.

Murdoch, now an American citizen who spends little time in his native Australia, is on an extended visit that will include the company’s Oct. 23 annual meeting in Adelaide.

Prime Minister Bob Hawke said he welcomes the merger. “It will probably mean a loss of jobs for some people, but as far as the community in general is concerned, they probably will get a better service,” he told reporters in Canberra.

The merger of the Melbourne Sun and the Herald will create the Herald-Sun with circulation estimated to reach 600,000, he said. Currently, the Herald sells 175,634 copies a day and the morning Sun 560,444.