Capital Sells Century 106 FM

Commercial radio broadcaster, Capital FM, has agreed so sell East Midlands Radio station, Century 106 FM, so that its merger with rival GWR Group is not investigated by the Competition Commission.

In a statement on this mornings stock exchange, the Office of Fair Trading (OFT) said that the merger of Capital and GWR could lead to a ‘substantial lessening of competition’ for radio advertising airtime in the East Midlands.

The OFT voiced concerns that the merger of Capital and GWR may result in increased concentration and reduced customer choice in the East Midlands, with the post merger position held by the Companies raising significant concerns for both local and national advertisers.

In order to avoid being referred to the Competition Commission, Capital and GWR have agreed to sell Capital owned Century FM. In response to the broadcasters decision, the OFT said: “The OFT considers that this proposed undertaking will clearly address the local advertising concerns.”

The radio groups now look set to complete their consolidation in early May, with the £711 million merger creating a single broadcaster with control of more than 40% of the radio advertising market.

Both Capital and GWR reported a slump in radio advertising at the end of 2004, with GWR stating that it had been affected by weak trading throughout October and November, but boosted by some growth during December. Meanwhile, Capital reported a dip in revenues in the fourth quarter, predicting that January will be flat year on year.

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