Nexstar Media Group said Thursday evening that it has received approvals from both the Federal Communications Commission and the Department of Justice for its acquisition of local television station operator Tegna, and confirmed that the transaction has closed.
The market reaction was immediate in extended trading: Tegna Inc (TGNA) shares rose 9.3% in aftermarket trade, while shares of Nexstar Media Group Inc (NXST) climbed roughly 3%.
The FCC issued a separate statement confirming its approval of the merger, noting in that release that Nexstar will hold ownership of less than 15% of U.S. television stations as a result of the transaction.
Regulatory signoff and the closing of the deal follow a period of legal and industry opposition. The approvals came just days after a coalition of eight states filed suit seeking to block the merger. In addition, streaming and satellite television provider DirecTV had sought to prevent the transaction from moving forward.
Under the terms announced previously, Nexstar acquired Tegna for approximately $6.2 billion. That purchase consolidates operations to form the largest broadcast station group in the United States by station ownership.
Context and immediate implications
The combination locks in a sizable expansion of Nexstar's broadcast footprint while ensuring the company remains under the FCC's stated ownership threshold - less than 15% of TV stations nationwide. The deal closing resolves a key regulatory hurdle but comes after legal challenges that raised uncertainty about the transaction's ultimate path to completion.
Market response
Investors moved quickly to reprice the two companies following the announcements. Tegna's after-hours gain was the larger of the two moves, reflecting the premium expected from the agreed purchase price. Nexstar's share increase was more modest in aftermarket trading.
Key points
- Federal Communications Commission and the Department of Justice approved the Nexstar-Tegna merger, and the deal has closed.
- Tegna shares rose 9.3% in after-hours trading; Nexstar shares increased about 3%.
- The acquisition, for approximately $6.2 billion, creates the largest U.S. broadcast station group, with Nexstar owning less than 15% of television stations.
Risks and uncertainties
- Legal challenges from eight states had been filed to block the merger - a source of prior regulatory and litigation risk to the deal.
- Opposition from industry participants, including DirecTV's attempt to block the transaction, highlighted ongoing competitive and distribution disputes relevant to broadcasters and pay-TV providers.
The regulatory approvals formalize the transaction but also underscore that the merger was subject to significant scrutiny and litigation before reaching closure. Factors such as future regulatory attention or additional legal actions are not detailed in the available statements.