Nexstar agrees to acquire Tegna in $6.2B megadeal
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Nexstar, the largest local broadcast group in America, has agreed to acquire Tegna, the fourth-largest local broadcaster, in an all-cash deal valued at $6.2 billion.
Why it matters: The merger would create the largest local broadcast company in the country by far.
- Barring any forced divestitures, the company would span 265 local TV stations across 132 of the country's 210 television designated market areas.
The big picture: The deal will serve as a litmus test for the Trump-era Federal Communications Commission, which will ultimately decide whether a merger of this magnitude should be approved.
- FCC chair Brendan Carr has long advocated for repealing decades-old local broadcast consolidation rules.
- The Biden administration opposed this type of consolidation, killing Tegna's $5.4 billion attempt to combine with Standard General in 2023.
Zoom in: The deal, announced Tuesday morning, will see Nexstar pay $22 per share to acquire all of Tegna's outstanding shares.
- The all-cash transaction includes Tegna's net debt, as well as estimated transaction fees and expenses.
- The transaction has been unanimously approved by Tegna's board of directors.
Between the lines: The deal price puts a significant premium on Tegna's stock that likely made it easier for Tegna to eliminate any other possible suitors from its dance card.
- The purchase price represents a whopping 31% premium to Tegna's average 30-day average stock price ending Aug. 8, per Nexstar. Shares closed Monday at $20.18.
Zoom out: Local broadcasters have celebrated the Trump administration's push to roll back old local broadcast rules in favor of more consolidation, which has ushered in a new level of deal interest.
- Sinclair, the third-largest local broadcaster in the country, last week said it launched a strategic review of its broadcast business, which includes 178 television stations in 81 markets.
- Late Monday night, reports emerged that Sinclair was interested in a broadcast merger with Tegna, which may have prompted Nexstar and Tegna's announcement Tuesday morning.
What to watch: Any of these deals could run into FCC ownership cap issues, but it's possible Carr would issue temporary waivers to approve the deal, on the assumption that regulators could raise the ownership cap threshold.
- Currently, no single broadcaster can own stations that would collectively reach more than 39% of U.S. households. And no single entity can own more than one of the four largest stations in any single market.
Editor's note: This story has been updated to clarify that Nexstar will pay $22 per share.
