Media General and Meredith announced a merger valued at $2.4 billion that will create the third largest TV station operator in the United States, another marker of the continuing consolidation in the broadcast TV space.
The newly formed Meredith Media General will control 88 TV stations in 54 markets, reaching 30 percent of the country.
Under the agreement, Meredith shareholders will receive cash and stock valued at $51.53 a share, a 12 percent premium over Friday's closing price. Meredith CEO Steve Lacy will be in charge of the combined company, with executives from both sides filling in the rest of the decision-making ranks.
Meredith's Des Moines, Iowa, headquarters and Media General's Richmond, Va., headquarters will be kept intact, with the merged company incorporated in Virginia. And Meredith's magazine publishing division, which puts out popular monthlies like Better Homes and Gardens and Shape, will also be housed within the combined company. Analysts believe the merged company will look to sell those magazine assets to a company like Time Inc. once they receive regulatory approval for their merger.
"Shareholders of both companies will benefit from the upside potential of a diversified and strategically well-positioned media company with a strong financial profile and the ability to generate significant free cash flow," said Media General chairman J. Stewart Bryan III in a statement announcing the deal.
The deal between Meredith and Media General is only the latest merger of large station groups. In 2013, for instance, Gannett bought Belo, while Tribune acquired Local TV Holdings. In 2014, E.W. Scripps bought Journal Broadcast Group and Sinclair purchased Allbritton's stations.
Stations are bulking up amid a concurrent consolidation of the pay-TV market and are looking to achieve scale and leverage amid a changing regulatory landscape for broadcast retransmission negotiations. The FCC is currently reviewing rules governing these talks.
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