Low advertising sales and record high prices in printing paper are causing major changes in Iceland's newspaper market, namely the merger of two newspaper rivals, IceNews-Daily News reported Saturday. Publishing companies Arvakur hf. and 365 hf., formerly Dagsbrun hf., have agreed to merge newspapers Frettabladid and Morgunbladid.

Under the new contract, Frettabladid will become the freely distributed sister paper of Morgunbladid, and 24 Stundir (the current holder of that title) will merge into Morgunbladid itself, a paid-for newspaper.

The merger is expected to cause some workers to lose their jobs, IceNews-Daily News reported.

Since Frettabladid launched in 2001, it has been competing with Morgunbladid, even with their different distribution tactics. The merger has caused concern, despite the newspapers' promises to remain independent and impartial, as there will now be just one national newspaper outside the new company, according to IceNews-Daily News.