Media General to Acquire Meredith Corp. in $2.4B Deal to Create TV Station Giant

The new Meredith Media General will be "a powerful new multiplatform and diversified media company," the firms say.

Media General and Meredith Corp. on Tuesday announced a definitive deal agreement under which Media General will acquire all of the outstanding common stock of Meredith in a cash and stock transaction valued at approximately $2.4 billion.

The new group will be the third-largest owner of major U.S. network TV affiliates, the companies said. It will initially own 88 stations in 54 markets, reaching 30 percent of U.S. TV households. It will include 40 big four network-affiliated TV stations located in the top 75 markets. "Stations in six markets will be swapped or otherwise divested in order to address regulatory considerations," the companies said. These markets are Portland, Ore.; Nashville, Tenn.; Hartford-New Haven, Conn.; Greenville-Spartanburg, S.C., and Asheville, N.C.; Mobile, Ala., and Pensacola, Fla.; and Springfield, Mass. 

The firms also touted the combination as creating "a powerful new multiplatform and diversified media company to be known as Meredith Media General."

Media General operates or services 71 TV stations in 48 markets, including KRON-MY in San Francisco/Oakland/San Jose, WIVB-CBS and WNLO-CW in Buffalo, N.Y., and WTEN-ABC and WXXA-FOX in Albany/Schenectady/Troy, N.Y., and also has a digital media business. Meredith owns 17 TV stations and various lifestyle magazines targeting women, including Better Homes & Gardens and Family Circle.

Under the terms of the agreement, Meredith shareholders will receive cash and stock valued at $51.53 per share, which represents a 12 percent premium to Meredith's closing stock price on Sept. 4.

The merged company will have annual revenue of $3 billion and operating cash flow of more than $900 million. More than $80 million in total synergies savings is expected within the first two years.

Current Meredith CEO Steve Lacy will lead the new group as CEO and president. "This merger will create a strong and efficient company positioned to realize the significant earnings and cash flow potential of local broadcasting; leverage the unparalleled reach and rich content-creation capabilities of Meredith's national brands; and capture the rapidly developing growth potential of the digital media space," he said. "It also positions Meredith Media General to deliver enhanced shareholder value and participate in future industry consolidation."

The deal is expected to close by the end of June 2016.

It comes after similar deals for TV stations in recent years. The companies didn't immediately say if they plan to separate the TV and print operations, as Gannett Co., Tribune and News Corp have done.

 

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