Two more media giants combine forces. This time – Media General and Meredith Corp. Last week Media General announced it will buy Meredith Corp. in a cash and stock transaction worth an estimated $2.4 billion, reports Bloomberg Business.

In a statement about the merger, Meredith CEO Steve Lacey, who will lead the newly-formed Meredith Media General, said the combined companies will generate $3 billion in revenue in the first year. The reason for the merger is strategic. According to the announcement, the benefits to the companies include:

• Meredith Media General will become the third-largest owner of major network affiliates, starting with 88 stations in 54 markets, giving the company the ability to reach 30% of all U.S. homes with a television.
• The company can leverage its content creation expertise and its brand’s reach to 100 million American women and over 60% of all Millennials.
• The merger will create an even more powerful digital platform for the companies, reaching more than 200 million monthly unique visitors on its national and local consumer sites.
• Meredith Media General will be able to increase its business-to-business capabilities in growth sectors like content, mobile, social, video and native advertising.
• The combined companies will yield $80 million in synergies in the first year, and with stronger cash flow, will be able to pay down debt.
• The merger will put the company in a better position to negotiate with media distributors and content providers and to acquire additional media assets to expand its growing portfolio.

Meredith CEO Steve Lacy said, “We are excited about the opportunity to create a powerful new multiplatform and diversified media company with significant operations on the local and national levels. This merger will create a strong and efficient company positioned to realize the significant earnings and cash flow potential of local broadcasting; leverage the unparalleled reach and rich content-creation capabilities of Meredith’s national brands; and capture the rapidly developing growth potential of the digital media space. It also positions Meredith Media General to deliver enhanced shareholder value and participate in future industry consolidation.”Paul Sweeney of Bloomberg Intelligence said that we will see more of this type of media merger, as the cable, TV, and other media companies adjust to the changing needs of consumers.”I think this really is a strategic transaction, and I think the broadcast television business is generally a very healthy business, but there are some major issues out there that it needs to deal with, most notably the fact that consumers are changing their behavior. They’re getting more content over the Internet, and all media content players, including the broadcasters and the magazine companies like Meredith need to figure out how to compete in that world,” said Sweeney.Insider Take:From financial and strategic perspectives, the merger makes sense with strategic and financial benefits. The two companies will operate more efficiently as one company, while leveraging their respective strengths. They gain negotiating power and market share by combining forces. As the media world spreads across platforms, it makes a lot of sense to join forces.The challenge with any acquisition or merger is the execution of a strategic vision and bringing a diverse group of teams and products, programs and content together in a way that propels the new combined company forward. We have seen many companies fail before them, and others succeed. Leadership and smart execution will make the difference here.The critical questions: Do they have the innovation chops to really understand and leverage “new media”? Will they be able to create cross-platform solutions from scratch, or are they going to just rehash things and call them new? We’ll be watching.~ Dana E. Neuts, Subscription Insider