The Newsweek merger with The Daily Beast is pretty official, since Tina Brown acknowledged the news with a post on The Daily Beast, "What does this exciting new media marriage mean? It means that The Daily Beast’s animal high spirits will now be teamed with a legendary, weekly print magazine in a joint venture, named The Newsweek Daily Beast Company, owned equally by Barry Diller’s IAC and Sidney Harman, owner (and savior) of Newsweek. As for me, I shall now be in the editor-in-chief’s chair at both The Daily Beast and Newsweek."

Harman, the billionaire stereo equipment magnate who bought struggling Newsweek for a dollar earlier this year, described Brown as "one of the transcendent editors of our time" to the Wall Street Journal (Brown's legacy includes reviving Vanity Fair and The New Yorker, as well as founding the short-lived Talk magazine before founding online-only The Daily Beast) and explained why earlier merger discussions with Diller and Brown failed:

Those talks fizzled in part because Mr. Harman felt the agreement diminished his role in the editorial process, which is what drew him to Newsweek in the first place.
Mr. Harman said in an interview that earlier negotiations stalled because of a "series of misunderstandings" that included the nature of his role. Mr. Harman said he expects to be more involved in the editorial process than he understood the earlier deal would have allowed.
"I have every instinct, and Tina has blessed this, to be a participant in terms of sharing and discussing ideas, but recognizing where the editorial authority simply must stay," Mr. Harman said.

Here's the official press release about the merger. Harman also told WSJ that some layoffs would come from both companies. The Daily Beast's staff will move from the Frank Gehry-designed IAC Building on West 18th Street to Newsweek's soon-to-be new offices in the Financial District.