DOJ Scrutinizing Nexstar/Tegna Deal
A DOJ request last week for additional information about Nexstar's proposed $6.2 billion purchase of Tegna means the transaction will face serious scrutiny at the agency, antitrust attorneys and industry officials told us in interviews. “This is an indication that the deal might not necessarily be in trouble, but that they’ve got plenty of work to do to get it through,” said Bona Law's Steven Cernak.
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DOJ issued second requests for information to both Nexstar and Tegna on Oct. 30, Nexstar said in a Securities and Exchange Commission filing Friday. The company declined to comment on the specifics of the request. A person familiar with the deal said the request was expected and routine for transactions of this size, but antitrust attorneys told us that very few receive that level of scrutiny, regardless of size.
Under the Hart-Scott-Rodino Antitrust Improvements Act, a second request for information pauses the waiting period for government review until the parties fulfill that request. “You get a couple thousand Hart-Scott-Rodino’s a year, [and] 90-plus percent of them do not get a second request,” Cernak said. “That’s an indication the DOJ has plenty of questions.”
Second requests “tend to hold up transactions for many months," said Jon Dubrow, U.S. head of Antitrust Group at McDermott Will &Schulte. “They take a long time to comply with -- substantial document production, substantial data productions, interrogatories.”
In its SEC filing, Nexstar said it expects the deal to be completed by the second half of 2026, the same prediction it made when the agreement was announced in August. The company confirmed Tuesday that it hasn't yet filed the proposed deal with the FCC. "We will file when the government shutdown ends," a spokesperson told us.
The Trump administration’s priorities in merger reviews aren’t well defined yet, but the current DOJ seems more open than the previous one to reaching settlements with companies seeking to make deals, attorneys told us.
"The DOJ has traditionally been pretty insulated from the White House, but this administration is closer," Dubrow said. " It's a more political environment than we’ve seen in the past.” He and Cernak both pointed to DOJ’s settlement approving the $14 billion merger of Hewlett-Packard Enterprises and Juniper Networks as an example of the department's openness to settlements and lobbying. DOJ initially sued to block that deal but dropped its claims after HPE agreed to some concessions. A group of state attorneys general have pushed for an in-depth investigation of that settlement (see 2510150063).
Nexstar CEO Perry Sook has been vocal in recent earnings calls and presentations about the company’s focus on lobbying regulators and lawmakers. According to OpenSecrets, it has spent over $2.4 million on lobbying this year.
It isn’t yet clear if DOJ would pursue concessions from Nexstar/Tegna or what such concessions might be. Gail Slater, the department's antitrust head, said in a speech in April that her efforts will focus on markets that affect “the average American in the heartland.” Sook said in May that he had received indications that DOJ won’t seek to block broadcast mergers over advertising competition in the Trump administration. “Pretty high up the food chain at the DOJ,” officials understand that broadcasters compete with internet advertising, he said then.