To win Department of Justice approval for its $3 billion purchase of Hispanic Broadcasting Corp., Univision Communications must give up two Entravision board seats and rights to vote on or veto Entravision mergers.
The terms are in addition to a previously announced divestiture of most of its 30% ownership stake in Entravision Communications.
The complete terms of the merger agreement were disclosed by the DOJ, which simultaneously filed suit in U.S. District Court and offered a consent decree to settle the suit. A final judgment on the agreement will come after a 60-day public comment period. The FCC also must approve the deal after review expected to be completed soon.
The consent decree requires Univision to cut its stake to 15% within three years and 10% within six years, and to convert its holdings into nonvoting equity with limited rights.
The DOJ cited the fact that HBC and Entravision are "each other's closest competitors" in many areas where there are a limited number of Spanish-language radio stations.
"If the combined company were to retain a large equity stake and governance rights in Entravision, Univision's acquisition of HBC would substantially reduce competition," the DOJ added, "and result in increased prices and reduced levels of service in the sale of advertising time on Spanish-language radio."
Univision, based in Los Angeles, is the nation's largest Spanish-language TV programmer. It owns broadcast networks Univision and TeleFutura and cable's Galavisión.
HBC owns 60 radio stations with net revenue of $240 million. Entravision owns 55 radio stations 49 TV stations ($65 million radio revenues, $209 million total). Many of the TV stations are Univision or TeleFutura affiliates.
Final government approval will be the end of a tumultuous road for the merger, which helped provoke an antitrust suit against Clear Channel Communications, the country's largest radio group. The suit, filed by Spanish Broadcasting System, was dismissed by a federal district judge in Miami last month. Spanish Broadcasting alleged that Clear Channel scuttled negotiations that could have led to a merger between it and Hispanic Broadcasting and interfered with other business relationships.