CBS Says It Will Merge Its Radio Business With Entercom Communications

CBS Corp. said Thursday it has entered an agreement with Entercom Communications Inc to merge the latter with CBS radio. The move will give the two a footprint of 244 stations across the country, and in 23 of the the top 25 U.S. markets, according to a news release. The merger is expected to be tax-free to CBS shareholders, who will gain 72% of all outstanding shares of the combined company after the transaction. Existing Entercom shareholders will own 28% of the combined company on a fully diluted basis. "Radio reaches more Americans than any other medium, and offers advertisers outstanding ROI and local activation," Entercom Chief Executive David Field said in a statement. Field will lead the combined company. "This transformational transaction creates scale-driven efficiencies and opportunities to compete more effectively with other media to better serve our listeners and our advertisers." CBS shares have gained 38% in the trailing 12-month period and shares of Entercom have gained 43%, while the S&P 500 Index is up 20%.