Sinclair Broadcast Group, the largest U.S. broadcaster, will acquire Tribune Media Co., in a deal worth nearly $4 billion.
Headquartered in Baltimore, Md., Sinclair currently owns 173 stations and reaches more than 38% of the nation. The company will pay about $43.50 for each Tribune share, or about $3.9 billion, and will assume about $2.7 billion in Tribune net debt.
Sinclair apparently won out over another reported suitor: media giant 21st Century Fox, which The Financial Times reported last week was also in talks with private equity firm Blackstone in a joint bid to acquire Tribune Media.
The deal will widely expand Sinclair's broadcast reach. Tribune Media has 42 stations including WGN and stations in L.A., New York, Chicago and Philadelphia, and reaches more than 43% of the nation (the FCC gave it an exemption in 2013 to buy 19 stations from Local TV LLC).
"The Tribune stations are highly complementary to Sinclair's existing footprint and will create a leading nationwide media platform that includes our country's largest markets," Sinclair CEO Chris Ripley said in a statement.
The FCC's reversal of a rule about how market reach of UHF channels is calculated could keep the market share of a combined Sinclair and Tribune Media low enough that a deal is workable with some divestitures, according to Bloomberg Intelligence.
Tribune stockholders will get $35.00 in cash and 0.23 shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock owned. The $43.50 total per share represents a premium of about 26% over Tribune's unaffected closing share price on February 28, the day before media reports of a possible deal.
Tribune (TRCO) shares were up more than 4.5% to $42.14 in early trading Monday; shares closed Friday at $40.29, giving the company a $3.5 billion market cap.
Sinclair (SBGI) shares were up 0.5% in early trading to $36.95 Monday.
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.