NBC Clears FTC Antitrust Hurdle to Buy Telemundo

General Electric Co.’s NBC television was cleared by federal antitrust authorities to buy Telemundo Communications Group Inc., the second-largest U.S. Spanish-language broadcaster, for $2.7 billion.

The Federal Trade Commission said the government terminated its antitrust investigation after 30 days. The privately held broadcaster is controlled by Sony Corp. and Liberty Media Corp., which each own 34%.

When the purchase was announced last month, General Electric said it would pay $1.98 billion in equal amounts of cash and stock and would assume $700 million in debt from Telemundo.

NBC told the Federal Communications Commission, which must approve the deal, that the purchase would boost a rival to Univision Communications Inc.

“The proposed merger will result in Telemundo emerging as a more effective competitor to Univision, which will in turn directly benefit the large and rapidly growing Hispanic segment of the U.S. population,” NBC wrote in its application to the FCC.

The U.S. Spanish-language TV market, with fewer viewers and lower ad pricing than English-language TV, probably will become more profitable in the next several years because the Latino population is growing at five times the rate of other groups, analysts said. The combination would give NBC a way to boost revenue.

Analysts said the FCC probably will require NBC to sell one of three Los Angeles television stations the combined company would own, as a condition of granting its approval.

NBC asked for 12 months to comply with an FCC rule limiting companies to owning no more than two TV stations in a city.

The network has the right to broadcast in any language in the U.S. as part of its $3.5-billion contract for five Olympic Games through 2008.

Telemundo, based in Hialeah, Fla., owns a network and 10 TV stations in New York, Los Angeles, Chicago, Houston and other cities. It has network affiliates in 86 markets, serving 88% of Latino TV viewers in the U.S. It is a distant second in audience ratings to Univision, the other U.S. Spanish-language TV broadcaster.