The Capital/GWR merger is likely to lead to more consolidation in the industry, which Lorna Tilbian, media analyst at Numis, says will provide effective competition for the merged group.
She highlights the speculation that Emap and SRH will likely be next to tie the knot, quashing claims of a monopoly.
Buyers agree that the deal, tied to deregulation after the Communications Act, will encourage other radio brands to follow suit, with the big money being placed on Emap and SRH to be next.
Tim McCabe, head of radio at Vizeum, said: "Emap is saying that it is not going to panic, but all eyes are on it at the moment."
McCabe is upbeat about the proposed merger and claims the deal will make the planning and buying process easier for the commercial radio sector.
"Certain brands that don't perform that well individually will certainly benefit from the scale of one enlarged group," he said.
He is unconcerned about a hike in ads rates and claims that this may be productive for the industry, because it will incite advertiser demand, with more control placed on the media-owner side. Some buyers suggested that rates may even go down.
Richard Jacobs, head of radio at MediaCom, is similarly unfazed by talk of an integrated sales house. "We're not worried from a buying perspective as we also offer our own consolidated buying service," he said.
Jacobs said he is interested in branding and staff issues. "The two companies are led very differently culturally, so it will be interesting to see how that works.
"It will be important to determine which sales reps are working on what brands from an early stage. If this isn't worked out, it could be very unwieldy," he said.
Jacobs also said that careful attention will have to be paid on how the company and individual brands are marketed, so as to not dilute individual brands.
Citing the success of the BBC Radio 2 and key presenters such as Jonathan Ross and Terry Wogan, Vizeum's McCabe adds: "What would be really great is if they decide to plunder people from the BBC to open up the competition."
Jim Marshall, chairman of media agency Starcom and chair of the media futures group at the IPA, agrees that the merger opens up the chance to compete with the BBC.
"A key advantage of the deal is that it opens up competition with the BBC, which can only be a good thing. But Capital/GWR will have to make sure that they improve the product and invest in programming."
The Capital Radio and GWR merger will create the UK's biggest radio company, controlling 40% of the radio advertising market.
Despite controlling such a large part of the market, analysts do not believe that the deal is likely to be blocked following the experience of the Carlton/Granada merger.
According to Tilbian: "This is because radio is a much smaller industry than television."
It is the ad issue that is most concerning industry groups, however. Marshall says that there are some initial worries, but stresses that this does not mean that the IPA thinks that the deal is anti-competitive. "There are some concerns and we want to understand more," he says.
"The merged group would own 40% of the ad market, which is a very sizeable chunk. We will also have to consider whether the proposed merger may force up prices, as the group will hold a monopolistic position," he added.
However, as Tilbian points out radio holds just 7% of display advertising, whereas TV holds 30%.
ISBA has echoed these concerns and says that it will be analysing in detail the exact implications of the merger and has said that it would be keen to input its members' views into any Office of Fair Trading investigation or Competition Commission inquiry.
The merger will see the combined group owning one national and 55 analogue stations, and 93 digital stations, reaching approximately 18m listeners.
The new group, which will have a combined turnover of 拢243m, will represent a 36% share of the commercial radio audience but 40% of the ad market. The Daily Mail & General Trust and the directors of GWR will hold approximately 35.1% of the new company. Based on the share capital of the two groups, Capital Radio shareholders will hold 52% and GWR shareholders 48%.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .