Radio deal OK'd.

Citadel Broadcasting Corp.'s acquisition of rival ABC Radio from Walt Disney Co. is expected to close by the end of the year, now that federal antitrust authorities have completed their review of the deal.

U.S. Federal Trade Commission last week cleared the $2.7 billion transaction, which would create the industry's third-largest radio group.

Citadel agreed to buy the bulk of Disney's radio assets for about $2.7 billion in a deal structured to make the transaction tax-free for Disney shareholders.

The agreement includes ABC Radio's 22 radio stations in nine major markets, such as L.A.'s KLOS-FM (95.5) and KABC-AM (790), and ABC Radio Networks, which distributes programming to more than 4,000 affiliates.

Following the completion of the merger, Disney shareholders will own approximately 52 percent of Citadel; Citadel shareholders will own the remaining 48 percent of the combined company.

After the transaction, Citadel will comprise 177 FM stations and 66 AM stations, in addition to the ABC Radio Networks.

The Burbank-based entertainment giant's Radio Disney and ESPN brands and networks were not part of the deal.

Citadel is a Las Vegas-based radio broadcaster majority-owned by private equity firm Forstmann Little & Co. Disney decided to sell the stations after new chief executive Robert Iger reviewed all the media group's assets.