The Department of Justice will require Clear Channel to divest stations in four cities as a condition to approve the company’s acquisition by a group of private equity investors led by Bain Capital and Thomas H. Lee Partners.
The DOJ said the $19.5 billion deal, as originally proposed, likely would have resulted in higher prices to purchasers of radio advertising in Cincinnati, Houston, Las Vegas and San Francisco because Bain and THL already have substantial ownership interests in two firms that compete with Clear Channel in those cities, Univision and Cumulus.
Once the deal goes through, Clear Channel would have 90 days to divest a total of six stations to buyers approved by the DOJ’s Antitrust Division. That’s in addition to the 42 stations already earmarked for sale to meet FCC rules.
In an e-mailed statement to Bloomberg, Clear Channel stated: “We are pleased that the final regulatory approval has been obtained. The merger continues on track for a first quarter close.”
Bear Stearns pegged the stations to be spun off to represent about 2% of Clear Channel’s gross revenues. It believes the deal will close on or about March 15.
The DOJ’s Antitrust Division filed a civil lawsuit in U.S. District Court in Washington, to block the proposed acquisition. Yet at the same time, it filed a proposed settlement that, if approved by the court, would resolve the lawsuit and the DOJ’s competitive concerns.
The proposed settlement will be published in the Federal Register. Publication triggers a 60-day public comment period to the DOJ.