Christmas came two days early for Meredith Corp. and Gannett Co. Inc. today, as the media companies announced transactions that enable both to expand their broadcast portfolios.


Meredith, which currently owns 13 television stations across the country, this morning announced it has expanded that portfolio with the purchase of three stations - two in Phoenix and one in St. Louis - from Gannett for $407.5 million in cash.


The sale of the stations by Gannett Co. Inc. and Sander Media LLC is part of Gannett's planned $2.2 billion acquisition of Belo Corp., which Gannett announced this morning has been completed.


Gannett's sale of three of its stations to Meredith will satisfy a previously announced consent decree between Gannett and the U.S. Justice Department to resolve market concentration concerns.


With its now-completed purchase of Belo, Gannett has nearly doubled its broadcast portfolio to 40 stations. Together with stations it services, Gannett now has the largest independent station group of major network affiliates in the top 25 U.S. markets, reaching approximately one-third of all U.S. households, the company said.


"The completion of this transaction marks a significant milestone in Gannett's ongoing transformation into a higher-margin and more highly diversified company in the rapidly evolving media business," said Gracia Martore, Gannett's president and CEO.


Gannett, which in October reported earnings of 43 cents per share with flat revenue growth, expects to use the proceeds of the sale to reduce debt and for other purposes consistent with its capital allocation strategy. The company said it continues to maintain a strong broadcast presence in the St. Louis and Phoenix markets with KSDK-TV and KPNX-TV, respectively.


With Meredith's purchase of three stations from Gannett, the Des Moines-based media company picks up KMOV-TV, the CBS affiliate in St. Louis, along with KTVK-TV, an independent station in Phoenix. Meredith is also purchasing KASW-TV, the CW affiliate in Phoenix, which it plans to immediately sell to a third-party operator, SagamoreHill of Phoenix LLC.


"These are high-performing stations and will add to our already strong cash flow," Meredith Chairman and CEO Stephen Lacy said in a release. "We will increase our presence in the large and growing Phoenix market, where we own KPHO, the CBS affiliate. KMOV (CBS) in St. Louis adds another Top 25 market to our portfolio, and when combined with KCTV (CBS) in Kansas City, gives us powerful local brands in two of the Midwest's top news and sports markets."


In the first full year post closing, the stations are expected to generate combined revenues of $105 million to $115 million for Meredith, and be accretive to run-rate earnings per share by 16 to 18 cents. Meredith expects to finance the purchases with new bank and private placement financing.