Gannett strikes $2.2bn deal to buy Belo Corp
Gannett, the leading US newspaper company and parent of USA Today, Detroit Free Press and The Courier-Journal, has announced that it has struck a $2.2bn deal with Belo Corp, owner of 20 local TV stations—including ABC, CBS, NBC, Fox and the CW affiliates.
The deal was unanimously approved by the boards of directors of both companies, and will see Gannett become the fourth largest owner of major network affiliates in the US, reaching nearly 30 per cent of households.
"We are thrilled to bring together two highly respected media companies with rich histories of award-winning journalism, operational excellence and strong brand leadership," said Gannett CEO Gracia Martore, in a statement.
"It will significantly improve our cash flow and financial strength, enabling us to quickly pay down debt while remaining committed to disciplined capital allocation."
Pending FFC approval, the deal is expected to close at the end of this year, and will see Gannett’s broadcast portfolio increase from 23 to 43 stations.
Gannett will have a total of four stations in top 10 markets and will become the No. 1 CBS affiliate group and No. 4 ABC affiliate group while expanding its position as the No. 1 NBC affiliate group.
Gannett currently relies on its print business to generate revenue as opposed to broadcasting and digital units, but has said after the transaction, the broadcast segment is expected to contribute more than half of the company's total earnings.
Gannett will acquire all outstanding shares of Belo for $1.5 billion, and assume $715 million in existing debt.