WASHINGTON (Reuters) - Entercom Communications Corp (ETM.N) won U.S. antitrust approval to buy CBS Radio Inc on condition that it divest 13 radio stations in Massachusetts and California, the Justice Department said on Wednesday.
Entercom will divest an additional five stations as part of a deal to win approval from the Federal Communications Commission, said a source close to the proposed transaction who requested anonymity to protect business relationships.
The proposed merger, announced in February, would allow CBS Corp (CBS.N) to combine its radio business with Entercom to create the second-largest U.S. radio broadcaster by revenue.
To win Justice Department approval, the companies agreed to divest five stations in Boston and four each in San Francisco and Sacramento, the regulator said. As part of this divestiture, Entercom has reached local marketing agreements with Bonneville International Corp to program the eight California stations.
The companies will divest five additional stations in Los Angeles, San Diego, Seattle and Wilkes-Barre, Pennsylvania, the company said in a release. This is to win FCC approval for the transaction, the source said.
Entercom will transfer stations in Boston and Seattle to iHeartMedia Inc (IHRT.PK) and in exchange receive stations in Chattanooga, Tennessee and Richmond, Virginia.
Entercom and CBS Radio will transfer to Beasley Broadcast Group Inc (BBGI.O) WBZ FM in exchange for WMJX-FM, Entercom said. Both stations based are in Boston.
Three stations in Los Angeles, San Diego and Wilkes-Barre will go to Educational Media Foundation, a non-profit that specializes in Christian music.
With the deal, Entercom will have more than 200 stations.
“The required divestitures will protect competition for local businesses that advertise on radio stations in Boston, San Francisco and Sacramento,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
Entercom President and Chief Executive David Field said the approval was a “significant milestone.”
The deal is expected to close as soon as Nov. 17, Entercom said.
Reporting by Diane Bartz; Editing by Andrew Hay and Richard Chang