Trinity Mirror’s share price has surged as much as 10% as the publisher confirmed a £220m deal to create the UK’s biggest regional newspaper group, and refused to rule out making another move to buy Richard Desmond’s national titles.

Trinity Mirror’s deal to acquire Local World will effectively double its regional newspaper operation to more than 160 titles, accounting for 30% of the weekly circulation of all local papers in the UK.

Investors were cheered by the deal, which Trinity Mirror sorely needed to drive growth after suffering steep falls in advertising revenue through the summer, with its share price jumping as much as 10% to 176.5p in trading on Wednesday.

“We are making a very big bet on regional and local media,” said Trinity Mirror chief executive Simon Fox. “We do believe in local media. The industry needs to consolidate, particularly the regional press. We’ve seen significant consolidation in TV and radio in the UK, but there hasn’t been [large scale consolidation] in the regional press.”

Fox said that the enlarged operation will have a combined 120 million monthly browsers.

“With competition from Google and Facebook we need to be able to build bigger and better digital products for our readers and advertisers,” he said. “Scale is very important.”

Fox said that Trinity Mirror, which estimates cost savings of £10m to £12m in the second year after completion of the deal, is “absolutely not” looking to close titles but would not rule out job cuts.

“In any deal you would expect there to be some synergies,” he said. “But this deal isn’t about synergies. There are no specific plans. It is about investment and growth.”

Following the deal Trinity Mirror will continue to have a strong balance sheet with the company’s gearing – the ratio of net debt to earnings before interest, tax, depreciation and amortisation – at a healthy less than 1 times ratio and the publisher still has a £60m undrawn loan facility.

With the Local World deal due to be completed 13 November, observers believe Trinity Mirror is likely to seek to reopen talks with Desmond about buying some, or all, of Express Newspapers, the publisher of the Express and Star titles.

“We have referred to the fact the company still has the financial flexibility to do other transactions should the right opportunities come along,” said Fox, who did not rule out Express Newspapers as a target. “I’m not going to get drawn on any further transactions.”

The deal cost Trinity Mirror a total of £187.4m comprised of £154.4m for the 80% it did not already own, plus taking on £27m of Local World’s debt, and about £6m in transaction costs.

Overall the enterprise value of Local World was £220m, about five times its adjusted ebitda of £42m last year.

The sale of Local World has proved to be a cash cow for David Montgomery, its chief executive who formed the group in 2012 and will leave once the deal is completed, who made almost £10m from the sale of his 5% stake.

Daily Mail publisher DMGT, which owns a 38.7% stake in Local World, made £73m from the sale.

Trinity Mirror has an on-sell deal to offload 10 of Local World titles to the Iliffe family, a shareholder in Local World, for £15.8m.

Shares in rival regional newspaper group Johnston Press rose almost 3% on the back of investor optimism of further consolidation.

Trinity Mirror’s enlarged regional operation

Trinity Mirror regional titles: 84

Local World titles: 83

After sale of 10 titles to Iliffe enlarged group will own: 157