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Sinclair, Tribune deal tops May media and communications M&A

S&P Global's Chart Watch examines merger and acquisition activity in the media, new media and communications sectors in May.

Sinclair Broadcast Group Inc.'s pending acquisition of Tribune Media Co., which would create the largest TV broadcast company in the country, marked the largest deal announced in the media and communications sectors in May.

Sinclair agreed to acquire Tribune for $43.50 per share, marking a total purchase price of about $3.9 billion, plus the assumption of about $2.7 billion in net debt. However, the deal could face additional hurdles if the reinstatement of the Federal Communications Commission's UHF discount is successfully challenged.

The discount allows stations broadcasting in the UHF spectrum to attribute only 50% of TV households in their designated market areas toward the overall national ownership cap, which limits the reach of a single broadcast station group to no more than 39% of TV households. The U.S. Court of Appeals for the D.C. Circuit on June 1 issued a temporary stay of the FCC's UHF discount reinstatement. Sinclair and Tribune have filed in opposition of the stay. Without the UHF discount, Tribune is already over the 39% cap.

The media and entertainment sector ended the month of May with 59 deal announcements, down from 154 deals in April. Aggregate transaction and deal values for the sector fell to $6.91 billion and $4.15 billion, respectively, from $11.23 billion and $11.45 billion in April.

The communications sector saw seven deals announced in May, with aggregate transaction and deal values of $4.82 billion and $4.83 billion, respectively.

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