In a move that will nearly double its broadcast portfolio, USA Today owner Gannett (GCI) inked a $1.5 billion transaction on Thursday to acquire TV company Belo (BLC).

The buyout of Dallas-based Belo will push Gannett even further away from the newspaper industry it is most closely associated with in favor of the more lucrative TV business.

The deal will make TV and newspaper company Gannett the fourth-largest owner of major network affiliates in the U.S., with 21 stations in top 25 markets.

“We have been successfully transforming Gannett into a diversified multi-media company with broadcast, digital and publishing components across high-growth markets nationwide, and this is another important step in the process,” Gannett CEO Gracia Martore said in a statement. “It will significantly improve our cash flow and financial strength, enabling us to quickly pay down debt while remaining committed to disciplined capital allocation.”

Gannett offered to pay $13.75 a share for Dallas-based Belo, representing a 28.1% premium to the company’s closing price of $10.73 on Wednesday.

When the assumption of about $715 million in existing Belo debt is included, the value of the acquisition rises to about $2.2 billion.

By getting its hands on Belo, Gannett will increase its number of stations to 43 from 23 and allow the company to reach almost one-third of U.S. households.

“This is an outstanding and financially compelling transaction for our shareholders.  It is also a testament to the tremendous value our employees have created over Belo's long history and to the strength of our brand in the media industry,” Belo CEO Dunia Shive said.

The companies see the transaction closing by the end of the year, subject to approval from two-thirds of the voting power of Belo shares and a green light from antitrust regulators as well as the Federal Communications Commission.

Gannett said Belo’s directors and executive officers, who collectively own about 42% of the voting power of the company’s outstanding stock, have agreed to vote their shares in favor of the deal.

Wall Street applauded the move by Gannett, bidding the McLean, Va.-based company’s shares 25.94% higher to $25.00 in premarket trading. Belo soared 27.87% to $13.72.

The buyout is expected to be financed with cash on Gannett’s balance sheet and by tapping capital markets and bank financing.

Despite the deal, Gannett said it has replaced its existing share buyback program with a new one valued at $300 million that expires in two years. The company said it will maintain its existing dividend plan.

J.P. Morgan Chase (JPM) served as financial advisors to Gannett, while Belo was advised by Royal Bank of Canada’s (RY) RBC Capital Markets.

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