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Nexstar Media Group will buy Tribune Media Company in a $6.4 billion deal. The agreement makes Nexstar the biggest regional TV station owner in the US. Shares of both companies soared after the news broke about the acquisition.
How Nexstar accumulated power
Nexstar is a Texas-based organisation that has taken over the Tribune Company, a media giant located in Chicago. The corporation already owns affiliates of the US networks ABC, CBS, NBC, and Fox. The Tribune company has control over several newspapers and 42 TV stations.
The merger comes after Sinclair Broadcast Group failed in its bid to buy the Tribune Media. The attempted acquisition fell through after the US Federal Communications Commission (FCC) Chairman, Ajit Pai, feared that the deal would make Sinclair an entertainment monopoly.
Nexstar’s chief executive officer (CEO), Perry Sook, said that the deal would be beneficial to both parties.
‘We have thoughtfully structured the transaction in a manner that positions the combined entity to better compete in today's rapidly transforming industry landscape and better serve the local communities, consumers and businesses where we operate', said Sook in a statement.
Tribune Media Company's chief executive officer (CEO), Peter Kern, also praised the merger of the entertainment corporations.
‘We are delighted to have reached this agreement with Nexstar as it provides Tribune shareholders with substantial value and a well-defined path to closing. Together with Nexstar we can better compete by delivering a nationally integrated, comprehensive and competitive offering across all our markets’, said Kern in a statement.
How broadcast TV fares in Netflix era
The merger is expected to give Nexstar entry into the three biggest TV markets in the US -New York City, Los Angeles, and Chicago. The acquisition is the latest bid by broadcast companies to consolidate power to try to combat the growing viewership of streaming entertainment behemoth Netflix.
The merger will still have to be approved by the US FCC and the US Department of Justice.