Tribune to Acquire 19 TV Stations in $2.73 Billion Deal
UPDATED: The media company says it will acquire Local TV LLC to become the largest independent owner of stations in the U.S.
Tribune has agreed to acquire 19 TV stations in 16 markets in a $2.725 billion acquisition that the company said will make it the top independent owner of U.S. TV stations.
The media company said Monday that it has agreed to acquire Local TV Holdings LLC, whose principal owner is private equity firm Oak Hill Capital Partners.
"Upon closing, the acquisition will immediately transform Tribune into the country’s largest commercial TV station owner, with a total of 42 stations from New York to Los Angeles and Miami to Seattle," Tribune said. "Importantly, because most of Local TV’s stations are ranked number one or number two in revenue share in their respective markets, the transaction will generate significant free cash flow and be immediately accretive to Tribune’s earnings."
The deal follows Gannett's $1.5 billion acquisition of TV station group Belo Corp. in June, 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.
The expanded scale that Tribune will reach with the deal will enable it "to maximize national and local advertising opportunities and take advantage of a larger footprint, across which it will distribute its video and digital content, especially that created by the recently launched Tribune Studios and Tribune Digital Ventures, as well as its best-in-class journalism," the firm said. "The acquisition will also lead to more meaningful conversations with affiliates about distribution, which is especially important to the future of WGN America."
Tribune has been looking at a sale of its newspaper unit, which includes the Los Angeles Times and Chicago Tribune.
The Local TV deal is expected to close by the end of 2013. After completion, Tribune’s station portfolio will include 14 Fox affiliates, making it the biggest Fox affiliate group, 14 CW affiliates, which will mean the company will remain the largest CW affiliate group, five CBS affiliates, three ABC affiliates, two NBC affiliates and four independent stations. Tribune will own 14 stations in the country’s top 20 markets.
“This is a transformational acquisition for Tribune -- it makes us the number one local TV affiliate group in America, expands the distribution platform for our high-quality video content, and extends the reach of our digital products to new audiences across the country," said Tribune CEO Peter Liguori. "We couldn’t be more excited about Tribune’s future as America’s leader in creating and distributing original content and local news programming."
Tribune predicted that the deal would generate more than $100 million in annual synergies within five years after closing.