Gray Television is doubling down on local TV by buying its competitor Raycom Media for $3.65 billion in a cash-and-stock deal, the companies announced on Monday.
The deal, if given regulatory approval, will make Gray the third-largest owner of TV stations across the U.S., with 142 stations in 92 markets. The buyout breakdown is $2.85 billion in cash, $650 million in preferred stock, and 11.5 million shares of Gray common stock, according to the companies.
Gray stations reach about 10.5 percent of the U.S. currently but will increase to 24 percent if the deal is approved.
The FCC voted in November to pull back regulations in order to make it tougher for broadcasters to control multiple stations in small markets. Gray will divest from several stations in overlapping markets to make it easier to get antitrust approval, the companies announced.
Raycom president and CEO Pat LaPlatney will become Gray’s president and co-CEO. Current Gray CEO Hilton Howell will also become co-CEO of the new company, as well as executive chairman.
Wall Street liked the deal for Gray, with the company’s stock increasing more than 10 percent in early morning trading on Monday.
The deal is expected to close during the fourth quarter of 2018.