Seven West Media's plan to buy Perth's Sunday Times newspaper and Perth Now website from News Corp has sparked concerns about media diversity.
Kerry Stoke's Seven West and Rupert Murdoch's News Australia are also negotiating a news sharing arrangement that will see The West Australian newspaper, owned by Seven West, co-operate with News' daily papers and websites in other capital cities.
The proposed deal is reported to be worth up to $15 million.
Analysts and journalists warn it will limit news diversity in Western Australia, and give Seven West a stranglehold on the advertising market.
The West Australian is Perth's only daily metropolitan newspaper, with editions from Monday to Saturday.
Job cuts are now also on the cards as The West Australian continues to look for savings.
Seven West chief executive Tim Worner said the company, which also owns Channel Seven Perth and digital platforms, was looking to strengthen its commitment to Western Australia.
"We see the potential for a positive and growing future for the Sunday Times brand, which has been and will continue to be part of the fabric of this great state," he said.
Sunday Times and Perth Now staff were briefed about the deal in April, leading to speculation of widespread job losses, and worries about the future of media diversity in Perth.
The Media, Entertainment and Arts Alliance (MEAA) expects job cuts, and media analyst Peter Cox predicts at least half of the 50 editorial Sunday Times and Perth Now staff will lose their jobs.
The potential deal would require approval from the Australian Competition and Consumer Commission, which is now seeking submissions and investigating the possible ramifications, including the impact on the quality and diversity of news content, and advertising prices.
"It's going to lessen media diversity in Western Australia," Mr Cox told AAP.
"Whether it's enough to save the West's newspaper business, time will tell."
MEAA WA media section president Martin Turner said the deal would remove The West Australian's sole print competitor.
"That means The West has a vast hold on the Perth community in terms of Perth news," he said.
Seven West shares closed steady at $1.065, While News Corp shares dropped 22 cents, or 1.3 per cent, to $16.88.
