Warren Buffett is investing $600 million in EW Scripps deal to buy ION Media

• Warren Buffett’s Berkshire Hathaway plans to invest $600 million in EW Scripps Co. to help buy ION Media for $2.65 billion.
• The deal will significantly expand the American broadcasting company by boosting its television station footprint and distribution of its programming, according to people familiar with the details.
• Thanks to the deal, EW Scripps will have the ability to use its over-the-air network without acquiring huge leasing payments.

Berkshire Hathaway, owned by billionaire investor Warren Buffett, will invest $600 million in media group EW Scripps to help finance the purchase of US broadcasting company ION Media.

Berkshire will make a preferred-equity investment and will also receive a warrant to buy as many as 23.1 million Class A EW Scripps shares at $13 apiece, the WSJ said. Scripps stock was trading up by more than 70% in premarket trading at $17.10 a share, compared with $10.47 at the close on Wednesday.

Under the deal, which is set to be announced on Thursday, EW Scripps will buy ION Media for $2.65 billion. This will significantly expand the American TV station company by doubling its television station footprint and increasing distribution of its programming, WSJ quoted the sources as saying. The Journal added that $500 million in synergies is expected to come from this deal in the space of six years.

The Wall Street Journal first reported the news, which was confirmed by EW Scripps on Thursday.

EW Scripps, which is headquartered in Cincinnati, has a market value of roughly $850 million and runs 60 television stations with other networks such as Bounce and Court TV. ION Media, privately owned by investment company Black Diamond Capital Management and headquartered in Florida, operates television stations in 62 American markets, producing popular shows such as "NCIS: Los Angeles" and "Law and Order".

Buying ION Media will allow EW Scripps to use its over-the-air network without receiving big leasing payments, as streaming services like Netflix and free-to-air programming become more popular.