CBS Corp will merge its radio business with Entercom Communications Corp in a tax-free deal, which the companies said would create the second-largest radio broadcaster in the United States by revenue.
The merged entity will own 244 stations, including CBS Radio's 117 stations, with pro forma revenue of about $1.7 billion on a trailing 12-month basis.
CBS had said early last year that it would explore strategic alternatives for its radio business.
The combination will be done through a Reverse Morris Trust transaction, a tax-free deal in which one company merges with a spun-off unit.
CBS Radio shareholders will own 72 percent of the combined company, while Entercom shareholders will own the rest, following the completion of the deal, which is expected in the second half of 2017, the companies said in a statement.
The combined company will be known as Entercom and will be headquartered in Philadelphia.
CBS's shares were up nearly 2 percent in premarket trading on Thursday.