Sinclair to expand US footprint with $3.9B Tribune deal

Sinclair Broadcast (NASDAQ: SBGI) has agreed to acquire Tribune Media (NYSE: TRCO) for $43.50 per share in cash and stock, an aggregate purchase price of approximately $3.9 billion. Representing a 26% premium to Tribune’s closing share price the day before reports emerged about a possible transaction, the deal also includes the assumption of $2.7 billion in Tribune debt.

The move will allow Sinclair to add 42 television stations in 33 markets to its offerings, as well as a variety of other assets. The deal capitalizes on the recent decision of the US Federal Communications Commission to reinstate the “UHF discount,” allowing broadcasters to own a greater share of US airwaves. The announcement comes just about a week after reports emerged of a competing joint bid for Tribune launched by Blackstone and 21st Century Fox.

Sinclair has been one of the more prolific corporate acquirers in consumer-facing media since the start of 2010, completing 22 deals—the same number as Google parent company Alphabet over the same period, according to the PitchBook Platform. Should Sinclair’s acquisition of Tribune close—and the uncertainty over that issue could persist, as the FCC is still reviewing its ownership policies—the company would equal Salem Media as the most prolific US corporate player in this space in the past seven-plus years.

Overall, corporate M&A interest in the B2C media industry is on the decline in recent years, dropping from 280 deals in 2014 to 208 in 2016. The change is somewhat similar for private equity transactions in the space, but not nearly so stark, with deal flow dipping from 88 in 2014 to 63 last year, per the PitchBook Platform. Here’s a fuller picture of the difference:

US PE vs. corporate M&A activity in US B2C media since 2010

Since 2010, US corporate investors have completed 1,545 overall M&A deals in media, per PitchBook data. By contrast, PE firms have completed 552 deals in the space—barely a third of the amount of corporate activity.