Media General to Acquire LIN for $1.6 Billion, Create U.S. TV Station Giant

5:07 AM PST 03/21/2014 by Georg Szalai
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UPDATED: The deal, valued at $2.6 billion including debt, will create "the second-largest pure-play television broadcasting company" in the U.S., according to the companies.

TV station group Media General said Friday it would acquire LIN Media for $1.6 billion to create what the companies say will be "the second-largest pure-play television broadcasting company" in the U.S.

The combined company will include 74 network-affiliated owned or serviced TV stations across 46 markets and will reach 26.5 million homes, or approximately 23 percent of U.S. TV households, subject to certain divestitures.

The deal is the latest in the ongoing consolidation of the TV station business as broadcasters have looked for scale to strengthen them in dealings with networks and pay TV operators and the like.

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Last year, Tribune agreed to acquire 19 TV stations in 16 markets in a $2.725 billion acquisition that the company said made it the top independent owner of U.S. TV stations.

That deal followed Gannett's $1.5 billion acquisition of TV station group Belo Corp., which at the time was the largest station deal in more than a decade and created the fourth-largest station group in the country behind CBS Corp., Fox and Sinclair Broadcast Group. And Sinclair Broadcast agreed to acquire the Allbritton TV stations for $985 million in another big deal.

Media General will pay $1.6 billion in cash and stock. LIN Media shareholders will get $763 million in cash and a total of 49.5 million Media General shares. Including debt, the total transaction enterprise value amounts to $2.6 billion.

Media General shareholders will retain approximately 64 percent ownership, and the combined company will retain the Media General name.

Upon closing of the transaction, Vincent Sadusky, LIN president and CEO, will become president and CEO of the new company. Media General chairman J. Stewart Bryan III will continue to serve in that role.

The transaction is expected to close in early 2015. It is subject to approval of shareholders and from regulators, including the FCC. The companies said they "anticipate that station divestitures in certain markets will be required in order to address regulatory considerations." They didn't immediately provide further details.

Bryan said the deal will "a financially strong organization that will have opportunities for profitable growth greater than either company could achieve on its own." He added: "Our two companies share a deep commitment to operating top-rated stations, to providing our local markets with excellent journalism and to engaging in meaningful ways with the communities we serve. The prospects for digital media growth are particularly exciting."

"This is an exciting and historic day for both companies," said Sadusky. "The merger of two highly respected broadcasters with superior television and digital assets creates maximum value for shareholders and provides us the scale, breadth and resources to compete more effectively in the rapidly evolving media landscape. Together, we will be able to better serve our local communities throughout our significant and diverse geographic footprint and further grow our national digital business."

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai


 

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