OFT Clears Final Hurdle In Capital GWR Merger

The Office Of Fair Trading (OFT) has taken the final step in clearing the merger of Capital Radio and GWR, with the stations announcing the satisfaction of all the pre-conditions set out previously by the OFT.

The OFT were concerned that the merger of Capital and GWR may result in increased concentration and reduced customer choice in the East Midlands, with the proposed deal raising significant concerns for local and national advertisers (see Capital GWR Merger Escapes Competition Inquiry).

Last month Capital FM agreed to sell its East Midlands radio station, Century 106 FM, to prevent the merger with GWR from being investigated by the Competition Commission, thus satisfying the OFT’s conditions (see Capital Sells Century 106 FM).

Capital and GWR have agreed to “effect the merger by means of a scheme of arrangement,” with both Capital and GWR shareholders required to approve the deal. The two companies aim to post the merger documentation as soon as is practical, with trading updates released in advance for the period to 31 March 2005.

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 (see NewsLine).

The radio industry has seen a wave of consolidatory talks in recent months, aside from Capital and GWR’s merger, with Emap believed to be preparing a bid for Scottish Radio Holdings, while Kelvin MacKenzie’s Wireless Group prepares a buyout auction (see Wireless Group Preparing Buyout Auction).

Elsewhere, Scottish Media Group has also been the subject of attention from its larger rivals, with Chrysalis believed to be considering a bid, while venture capitalists 3i and Lord Alli are understood to have offered £100 million for its acquisition.

Capital Radio: 020 7766 6000 www.capitalradiogroup.com GWR Group: 020 7284 3000 www.gwrgroup.com

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