Walt Disney Co. finalized a deal to sell its radio division, turning it over to Citadel Broadcasting Corp. in a transaction valued at about $2.7 billion.
The sale of the 22 stations and radio network is a stock-based transaction. So, Disney will combine ABC radio with Citadel and distribute shares of the new company – Citadel Communicaitons – to its shareholders. Disney investors will own 52% of the combined companies.
But Disney will take a lot of cash out of the deal.
The company plans to load ABC Radio with debt, keep between $1.4 billion and $1.65 billion, and only then give Citadel control of the stations and the debt. The maneuver limits taxes on the transaction.
Disney owns14 FM and 8 AM ABC stations in markets including New York, Los Angeles, and Chicago.
Las Vegas-based Citadel will then control 177 FM stations and 66 AM stations and Citadel Chief Executive Officer Farid Suleman will be chief executive officer of the new company.
Disney is not selling networks ESPN Radio and Radio Disney.