Jun 13, 2002 3 min read

DALLAS (AP) – Univision Communications Inc., the nation’s leader in Spanish-language television, is buying the largest Spanish-language radio broadcaster in the United States, Hispanic Broadcasting Corp., for $3.5 billion in stock. The deal announced Wednesday will greatly expand Univision’s arsenal of media properties that advertisers can use to reach the fast-growing U.S. Hispanic population of about 35 million people.

Under terms of the agreement, Hispanic Broadcasting become a wholly owned subsidiary of Los Angeles-based Univision Communications and will continue to be based in Dallas.

Hispanic Broadcasting currently owns and operates 55 radio stations in thirteen of the top fifteen Hispanic markets and reaches 60 percent of all U.S. Hispanic homes.

The company also owns and operates a network of Hispanic community-focused bilingual web sites.

Univision already owns two U.S. Spanish-language broadcast television networks, Univision and TeleFutura, 50 television stations, the Galavision Spanish-language cable network, an online service and a music business. Univision and its Spanish-language rival, the Telemundo network, have long dominated the U.S. market for Spanish-speaking viewers. Hispanics make up 12.5 percent of the U.S. population.

and are expected to grow to 25 percent by 2050.

“This transaction, which further expands Univision as the pre-eminent U.S. Hispanic media company, represents a tremendous opportunity for shareholders, advertisers and the many talented employees of both companies,” A. Jerrold Perenchio, Univision chairman, president and chief executive officer, said in a prepared statement.

Under the agreement, each share of Hispanic Broadcasting common stock will be exchanged for a fixed 0.85 shares of Univision Class A common stock. Using Univision’s closing share price Tuesday of $37.70, that represents a 31 percent premium compared to Hispanic Broadcasting’s Tuesday closing stock price of $24.45.

In morning trading on the New York Stock Exchange, Univision shares fell 12.4 percent, or $4.68 a share, to $33.02 while Hispanic Broadcasting shares rose 11.4 percent, or $2.78 a share, to $27.23.

The deal would give Hispanic Broadcasting shareholders about 26.5 percent of the combined company.

The two largest shareholders of Hispanic Broadcasting, the Tichenor family and San Antonio-based Clear Channel Communications Inc., have agreed to vote in favor of the transaction, as has Univision’s controlling shareholder, Perenchio.

The acquisition, which has been approved by boards of both companies, is subject to approval by the shareholders of both companies as well as regulatory approvals. The deal was expected to close by year’s end.

“Univision has a tremendous track record of success, and we believe that its powerful platform will create new opportunities for our employees and advertisers,” said McHenry T. Tichenor Jr., the Hispanic Broadcasting chairman, president and chief executive.

Last year, Hispanic Broadcasting officials said they were interested in buying the Telemundo network. Telemundo has since been bought by General Electric Co., which operates the NBC television unit.