E.W. Scripps (SSP -7.16%) announced today it will purchase ION Media for $2.65 billion, in a deal that's being backed by Warren Buffett's Berkshire Hathaway (BRK.A -1.26%) (BRK.B -0.85%). The acquisition will require regulatory approval and Scripps plans to divest 23 ION stations in order to comply with ownership restrictions in various markets. 

Scripps said the purchase would be immediately accretive to revenue growth, margins, and cash flow, and is expected to generate $500 million in synergies over the coming six years. The combination will create a powerhouse of network, cable, and multiplatform media.

A close-up of Warren Buffett standing in a crowd.

Warren Buffett. Image source: The Motley Fool.

The deal will be funded with $300 million in cash and $1.85 billion in debt. Berkshire will make a $600 million preferred-equity investment in Scripps to help fund the purchase of privately held ION. Berkshire will also receive a warrant to purchase up to 23.1 million Class A Scripps shares, with an exercise price of $13 apiece. 

Scripps operates a portfolio of 60 television stations, as well as a growing roster of broadcast networks including Court TV, Bounce, and Laff. The company also operates multiplatform news provider Newsy. 

For its part, ION Media is the only independent national broadcast network, reaching more than 100 million homes in the U.S. and an estimated 96% of the population. The company has 71 owned-and-operated stations, with a lineup of popular syndicated programming, including such staples as Law & Order, Criminal Minds, NCIS: Los Angeles, Blue Bloods, and Chicago P.D., among others. ION consistently ranks in the top 10 for network and cable audiences, but only 25th in advertising revenue, providing an avenue for immediate financial improvement. 

Scripps investors cheered the news, sending the stock up more than 7%.