CBS Corp. announced Friday completion of the split-off of its troubled CBS Radio Inc. unit and its merger with a subsidiary of Bala Cynwyd-based Entercom Communications Inc. The merger makes Entercom the nation's No. 2 radio operator.
As a result of the merger, participating CBS stockholders will receive one share of Entercom Class A common stock in exchange for each whole share of CBS Radio common stock they received in the exchange offer, CBS said in a statement. The transactions will enable CBS to retire about 17.9 million shares of CBS Class B common stock.
"The separation of our radio business is part of a broader strategy to make CBS even more focused on our content and all the ways we can monetize it," Leslie Moonves, CBS Corp. chairman and CEO, said in the statement. "We started on this path several years ago with the split-off of our outdoor advertising business. And just as we did with outdoor, we believe our radio transaction will allow us to unlock more value for our shareholders and further grow our revenue."
Entercom has said it will cut about $100 million in costs as part of the merger. In an interview Wednesday at the Hotel Sofitel, David Field, who now runs the company founded by his father, Joseph Field, said that "we will not take one cent away from the quality of the listener experience or the value we provide to advertisers."
Entercom has the right to use CBS Radio branding for a year after the deal closes, Field said, adding that Entercom would "reinvest tens of millions of dollars into brand and into our data analytics."
In all, Entercom-CBS Radio now own and operate 244 radio stations in 47 markets, reaching 100 million listeners. Among the stations already owned by Entercom were six CBS Radio stations in Philadelphia: WIP, KYW, WTDY, WXTU, WPHT, and WOGL.
The only larger U.S. radio operator is iHeartRadio. Field said Entercom would continue to look to acquire radio stations.
Staff writer Bob Fernandez contributed to this article.