GWR Group has announced today the proposed acquisition of DMG Radio Group from the Daily Mail and General Trust (DMGT). The deal, worth £146 million, will see GWR, which owns Classic FM as well as 38 local licences, add a further 8 UK local stations to its portfolio and enhance its overseas interests.
DMG currently operates stations in the East of England and the outskirts of London, which include Essex FM, Breeze 1521 and Mercury FM, and whose combined weekly audience is one million. Its minority interests including Medway FM will provide GWR with almost adjacent assets around London’s commuter belt.
The deal includes a 25% share in the 58 Australian local licences and a new Sydney licence currently owned by DMG, the combined potential audiences of which reach almost 8 million. The option to acquire the group’s remaining Australian assets will be available after three years of completion of the deal and the group will also take over the largest national commercial radio station in Hungary.
“This acquisition is a major step forward in the group’s strategy in the UK and Europe and provides us with the potential to broadcast to 36% of Australia’s population,” Henry Meakin, chairman of GWR, said of the deal.
Last month the group announced its intention to increase its commercial collaboration with DMGT, which currently owns a 18.8% stake in the radio group (see Classic FM TV Considered As GWR Increases Collaboration With DMGT). Under the terms of today’s deal DMGT’s ownership of the group will eventually be increased to 29.9% and Peter Williams, director of DMGT’s new media business, will join the GWR board as non-executive director.
“[The deal] is a strong vote of confidence from Daily Mail and General Trust, our longstanding and largest shareholder. It signals the start of important initiatives to cross promote our radio and DMGT’s print media and to exploit joint internet opportunities locally, in London and nationally,” Meakin said.
The deal is expected to run up against ownership legislation, which currently restricts GWR from holding any further radio licences in the UK, and the group is preparing to dispose of some of its smaller stations in compliance. “The board of GWR is currently considering the disposal of UK local licences it may need to make to continue with the points restriction prescribed by current legislation,” a statement read today. The points system now in operation for commercial licences prevents companies from holding more than 15% in aggregate of the total points in issue.
GWR Group: 020 7284 3000 DMGT: 020 7938 6000
