DALLAS The Gannett Company on Monday announced that the $1.5 billion purchase of Dallas-based Belo Corp. is complete, creating a media 'super group' that will beam its programming to an estimated third of the country.
Under the deal, Gannett also assumes about $700,000 in debt, bringing the total cost of the sale to $2.2 billion.
The Federal Communications Commission approved the deal on Friday, finding that Gannett's purchase of WFAA-TV's parent company did not violate any government antitrust rules in markets beyond Phoenix and St. Louis, wherethe Virginia-basedcompanyalready owned stations. The Department of Justice OK'd the deal last week on the contingent that Gannett part with the Belo stations there.
Gannett announced Monday that the Des Moines-based media conglomerate Meredith Corporation would purchase CBS affiliate KMOV-TV in St. Louis and the CW affiliate KTVK-KASW in Phoenix for $407.5 million in cash.
With the regulatory hurdles cleared, Gannett's portfolio of television stations balloons to 43, adding 17 additional properties in nine of the nation's top 25 markets. The purchase is strategic for Gannett, which, prior to the sale, did not own a station in Texas.
Belo owned stations in all four of the state's largest markets: WFAA-TV, the ABC affiliate in Dallas/Fort Worth; KHOU-TV, the CBS affiliate in Houston; KENS-5, the CBS affiliate in San Antonio; and KVUE-TV, Austin's ABC affiliate. Gannett sold KVUE to Belo in 1999.
Gannett will also now reach into the Pacific Northwest, acquiring KING-TV in Seattle and KGW-TV in Portland.
'We are thrilled to combine these two storied media companies, both of which are known for award-winning journalism, operational excellence and strong brand leadership,' said Gannett CEO Gracia Martore in a prepared statement. 'The completion of this transaction marks a significant milestone in Gannett's ongoing transformation into a higher-margin and more highly diversified company in the rapidly evolving media business.'
The sale means Gannett is now the owner of the most CBS affiliates, the fourth most ABC affiliates and furthers its reach as the No. 1 owner of NBC affiliates.
With the sale of WFAA-TV, the Dallas-Fort Worth Area no longer has a locally owned major television station. Belo headquarters were located across the street from WFAA's downtown newsroom on Young Street.
As The Wall Street Journal reported last week following the FCC approval, Belo shares soared 27 percent to $13.65 and Gannet's boosted 24 percent to $24.55. With the close of the sale, Belo stock will cease trading and will no longer be listed on the New York Stock Exchange.
Gannett hopes to save $175 million annually within three years of the deal's closure. The Virginia-based company also owns significant newspaper properties, including USA Today, The Arizona Republic and The Detroit Free Press, all of which rank among the top 20 highest newspaper circulations in the country.