The acquisition of Galaxy Radio Wales by Vibe Radio Services, a company jointly owned by Scottish Radio Holdings and GWR Radio Group, has been referred to the Competition Commission by competition minister Melanie Johnson over concerns of local advertising becoming too concentrated in the Bath and Bristol area.
A wave of consolidation in the radio sector was expected in the wake of the communications bill, which is currently before parliament. In the bill, there is provision for the merger of larger radio stations.
Ralph Bernard, executive chairman of GWR, has said: "We are concerned that against a background of government policy to deregulate media ownership, the competition minister has decided to refer this small acquisition by a joint venture partnership.
"[Johnson]'s decision appears at odds with the overall thrust of government policy."
GWR Group, which owns Classic FM and Classic Gold, has said that it does not believe that the acquisition of Galaxy Radio Wales will substantially reduce competition and that it will present evidence to the commission to prove this.
At the same time, Vibe Radio Services also acquired Eastern Counties Radio, but this has not been referred to the commission.
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