Nexstar’s $3.5 Billion Tegna Deal Cleared by Justice Department

The US Justice Department unconditionally cleared the $3.5 billion deal for Nexstar Media Group Inc. to acquire rival Tegna Inc., which would create the largest operator of local TV stations in the country, according to people familiar with the matter.

The DOJ granted what’s known as early termination to the companies, said the people, who were granted anonymity to discuss a confidential matter. That means the department has wrapped up its review of the deal. The DOJ opened an in-depth probe of the merger last year. The decision comes less than a day after a group of state attorneys general sued to block the acquisition.

Under federal antitrust law once companies fully comply with their legal obligations under an in-depth merger review, the government has 30 days to bring a case unless it ends the process early. The Federal Communications Commission must also sign off on the deal.

The DOJ, Nexstar and Tegna didn’t immediately respond to requests for comment.

Late Wednesday night a group of democratic attorneys general from states including California, New York and Colorado sued to block the transaction, arguing it would give the combined company too much control over television in dozens of markets around the US. The combination would impact the delivery of local news, raise pay-TV prices, and lead to job cuts, the states said.

Satellite television company DirecTV filed its own lawsuit challenging the deal, saying it will lead to prolonged programming blackouts as the newly enlarged company fights with distributors over fees.

If the deal goes through, the combined companies would own 265 full-power TV stations, reaching 80% of US households, according to the states’ lawsuit. Federal law presently bars a local station owner from serving more than 39% of the country. The companies are seeking a rule change or waiver.

Both Nexstar and Tegna operate stations affiliated with ABC, CBS, NBC and Fox. Nexstar also owns the CW network and the NewsNation cable network.

To contact the reporter on this story:
Josh Sisco in San Francisco at jsisco6@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Christopher Palmeri

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