Time of change

Many companies grow, two divide, and two will disappear

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Print this page by Robert Powell
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Media General will no longer have a corporate
headquarters in Richmond. Photo by Jay Paul

The past year has been a time of change for many of Virginia’s largest publicly traded companies. One of them is fighting off a takeover bid. Others have divided themselves in two. A third has more than doubled its size. Two more are about to disappear because of buyouts.

As this issue goes to press, Norfolk Southern Corp. has been steadfast in its rejection of takeover offers from Calgary, Canada-based Canadian Pacific Ltd. Norfolk Southern has said it is focused on cutting costs to improve profitability. The Norfolk-based company, a major transporter of coal, automotive and industrial products, has been hurt by a decline in the coal industry.

Canadian Pacific has stopped short of a proxy battle with Norfolk Southern. Instead Canadian Pacific plans to submit a nonbinding resolution to Norfolk Southern shareholders calling for the board to enter negotiations with its Canadian suitor.

Meanwhile, Gannett Co. Inc., a McLean-based media company, separated its publishing division from its broadcasting operations. The publishing unit, which owns newspapers in 92 markets, was spun off in June as a publicly traded company. It kept the Gannett name. The remaining broadcast and digital company, which has 46 television stations, is now called Tegna Inc.

Another company that has divided itself is Falls Church-based CSC (Computer Sciences Corp.) The public-sector business of CSC was spun off and merged with Fairfax-based SRA International to form CSRA Inc. 

Chesapeake-based Dollar Tree Inc., on the other hand, has more than doubled in size with its July acquisition of Family Dollar, based in Matthews, N.C. Dollar Tree had to ward off a competing bid for Family Dollar from Dollar General. The combined company now operates more than 13,600 stores with expected annual  sales of $19 billion.
Virginia will soon lose two of its largest public companies — Waynesboro-based wireless telephone provider Ntelos Holdings Corp. and Richmond-based television station owner Media General Inc.

Edinburg-based Shenandoah Telecommunications announced in August that it is acquiring Ntelos in an all-cash deal worth about $640 million. When the transaction closes this year, Shentel will have more than a million wireless customers. In addition, Arlington-based Towers Watson, which recently merged with Willis Group, will move its headquarters to Ireland.

Irving, Texas-based Nexstar Broadcasting Group in January announced it had reached a $4.6 billion deal with Media General after months of sparring between the companies. The Nexstar deal scuttled Media General’s merger plans with Des Moines, Iowa-based Meredith Corp., which was paid a $60 million breakup fee. The combined company will have 171 television stations in 100 markets.

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