In Depth

Nielsen to Buy Arbitron in $1.26 Billion Deal -- Combination Extends Nielsen's Ratings Monopoly to U.S. Radio

By Jack Neff
Advertising Age

Nielsen announced plans to buy Arbitron for $1.26 billion Tuesday morning, extending the company's monopoly reach on TV ratings in the U.S. to radio as well.

Nielsen, already by far the largest research company in the world, will add the No. 9 player in the 2012 Honomichl 25 rankings of research companies, creating a company with a combined revenue of around $6 billion -- nearly double the $3.3 billion 2011 sales of No. 2 research player, WPP's Kantar.

Arbitron had research revenue of $422 million last year, fetching a 26% premium to its closing share price and a handsome multiple of around three times sales. While Nielsen gets 53% of its revenue outside the U.S., almost all of Arbitron's revenue comes inside the U.S.

The deal is subject to regulatory approvals, which could involve added scrutiny since Arbitron and Nielsen long have stood as potential if not actual competitors for each other in TV and radio ratings. The deal could allow the companies to share panels in a way that extends media measurement accuracy in TV and radio alike and open new opportunities for analysis of sales impact from radio.

In a statement, Nielsen CEO David Calhoun said, "Arbitron will help Nielsen better solve for unmeasured areas of media consumption, including streaming audio and out-of-home."

Arbitron also will help Nielsen expand its integrated audience measurement across screens and forms of listening, said Steve Hasker, Nielsen president of global media products and advertiser solutions.