NEW YORK (AP) — Nielsen, the dominant source of TV ratings, on Tuesday said it had agreed to buy Arbitron for about $1.26 billion to expand into radio measurement.
Arbitron pays 70,000 people to carry around gadgets that register what stations they're listening to. Since Nielsen also collects cash register data, CEO David Calhoun said buying Arbitron will let Nielsen be a one-stop shop for advertisers who want to know how the radio advertising they buy affects product sales.
The acquisition will let Nielsen expand the amount of media consumption it tracks by about 2 hours per person per day to 7 hours, Calhoun said in an interview.
"You don't find many mediums that allow for that kind of increase," Calhoun said.
Arbitron's operations are mainly in the U.S., while Nielsen operates globally. Calhoun said another major driver for the deal is that Nielsen wants to spread Arbitron's tracking technology to other countries.
Evercore Partners analyst Douglas Arthur said Nielsen doesn't need traditional radio measurement to grow, but Arbitron seemed like a willing seller, and it will be a "nice complementary but not 'must have' platform."
Nielsen Holdings N.V. said it will pay $48 per share, which is a 26 percent premium to Arbitron's Monday closing price of $38.04. Shares of Arbitron, which is based in Columbia, Md., jumped $8.99, or 23.6 percent, to close at $47.03.
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