Gannett to Acquire Belo Corp. in $2.2 Billion Deal

A merger would make the company the nation’s fourth-largest owner of major network affiliates.

Gannett Co., Inc, has announced that it has entered into a merger agreement with Belo Corp. and that the combined company would boost Gannett into the nation’s fourth-largest owner of major network affiliates, reaching nearly a third of all U.S. households.

Under the terms of the deal, Gannett would pay approximately $1.5 billion in cash to acquire all outstanding shares of Belo, plus assume $715 million in existing debt. That would make the total package worth $2.15 billion.

Belo is a Texas-based company that was started in the mid-19th century with publications such as The Dallas Morning News. In recent years, the company's TV assets -- including affiliates of all four of the major networks -- have been its most prized. Five years ago, the company spun off its newspaper division.

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Shares of Belo jumped on the news. Gannett is offering to buy the company's stock at $13.75 per share, a 28.1 percent premium to the closing price on Wednesday.

Gannett says that the deal nearly doubles its current broadcast portfolio from 23 to 43 stations and it will now be the top CBS affiliate on top of its distinction of already being the top NBC affiliate.

Gracia Martore, CEO of Gannett, said in a statement, "By enhancing our portfolio with one of the largest, most geographically diverse and network-balanced TV station groups in the country, the new Gannett will be well positioned to lead innovation, bolster our existing growth initiatives and take advantage of new opportunities in the emerging digital media landscape.”

The company hopes to close the deal by the end of the year. The most significant step to complete the transaction will now be getting government regulators to approve it.