Capital Radio Group’s proposed £15 million acquisition of London-based Choice FM has been given the go-ahead by the Office of Fair Trading.
Choice broadcasts urban contemporary music on two FM licences serving a potential audience of 5.8 million adults in London. It also owns a network of five digital radio licences covering London, Yorkshire, the Severn Estuary and North West and North East England.
Capital Radio already owned a 19% stake in Choice, which it acquired for around £3.3 million in 2001. The broadcaster announced its a intention to take control of the remaining 81% in the urban radio group last November in a move that prompted the Office of Fair Trading to launch inquiry.
Commenting on the decision, Capital Radio’s strategy and development director, Nathalie Schwarz, said: “We are delighted with this announcement from the OFT approving our acquisition of Choice, the first decision of the OFT considering the radio industry since the new regulatory environment created by the Communications Act 2003 came into force.”
She added: “Choice is an excellent investment for Capital and one that complements our existing portfolio of stations in London. We believe that Choice has significant opportunities under its existing formats to grow its audience across London and the UK and look forward to announcing completion of the deal.”
It had been widely accepted that the relaxation of the radio ownership regulations under the Government’s new Communications Act would trigger a wave of consolidation in commercial radio industry with the sector’s biggest players vying for supremacy in the newly deregulated market.
The expected raft of mergers and acquisitions in the commercial radio market has not come as quickly as expected. However, some of the industry’s smaller players have been making moves and SMG recently sold its 27.8% stake in Scottish Radio Holdings to Emap for £90.5 million.
