Capital-GWR merger gets go-ahead

THE Office of Fair Trading will not refer the proposed merger between radio groups GWR Group and Capital Radio to the Competition Commission.

Shares in each company rallied around 5%, with GWR up 22p at 430p and Capital 13p higher at 255p. The City had expected the deal to go through but only after a competition investigation.

The stocks were also boosted on news that industry regulator Ofcom made only two demands on the new group. GWR Bristol and Bath FM must continue to offer separate breakfast shows in the South-West. The same will also apply to MFM/Buzz Wrexham and Chester FM in the North-West.

Ofcom also said that its statutory ownership rules would not be breached by the proposed merger. 'Specifically, Ofcom has concluded that the specific ownership rules designed to protect plurality in relation to local analogue radio licences, local digital multiplex licences, and local digital sound programme service licences would not be breached if the merger were to go ahead as currently envisaged,' Ofcom said.

The regulator established that 30 GWR local analogue radio licences would see change of control as a result of the merger.

Rival radio groups had urged Ofcom to ban a merged Capital-GWR from bidding for FM licences for the next five years. They also wanted the media regulator to police programme content to make sure the £667m group is broadcasting enough locally-produced programmes.

A combined Capital Radio and GWR - in which Daily Mail and This is Money parent company DMGT has a 29.9% stake - will have a 40% share of the radio advertising market and 36% of the commercial radio audience.