GMG now owns 12 major FM stations, including its own Real and Smooth networks, and the Century FM stations in the North West and North East, which it acquired from GCap Media for £60m in October this year.
A week ago, GMG-owned Smooth FM won the right to change format to target the over-50s after successfully lobbying Ofcom, the same demographic as the Saga network.
John Myers, chief executive of GMG Radio, said: "Our format change in London will allow us to develop a near-national brand aimed at an older demographic. Alongside this, we expect that our successful Century and Real Radio stations and the launch of our new North East station in 2007 will ensure that GMG becomes the third-largest radio group in total hours by the end of next year with a broad appeal to all adults over 25."
Saga Radio has three services in the Midlands, Glasgow and a new station that will launch in the North East of England in 2007. The services, which are a mix of music, talk and news currently broadcast to 900,000 listeners.
The first of Saga's FM radio broadcasts went on air in October 2001 and at the time was the first commercial radio station to specifically target the over-50s.
Saga Group is owned by private equity firm Charterhouse, which is believed to be planning a £2bn flotation of the entire over-50s brand, including the iconic magazine. GMG handles some of Saga FM's regional sales so when the radio brand came up for sale in September, the group was always an interested party.
GMG Radio is the fourth largest radio group in the UK judged on total listening hours. Its existing portfolio consists of: Real Radio, Smooth FM, Century, 96.3 Rock, Jazzfm.com, Real Radio on DAB and Sky Digital , Smooth FM on DAB, Sky Digital and Freeview and Century FM on DAB.
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