Westinghouse Gets Final Approval to Complete Its Acquisition of CBS

The Federal Communications Commission gave Westinghouse Electric Corp. final approval Wednesday to complete its $5.4-billion purchase of CBS Inc., clearing the way for creation of the nation’s largest radio and TV station group.

Westinghouse said the acquisition, announced less than four months ago and approved by shareholders last week, would be completed Friday. CBS stockholders would receive $82.065 for each of their shares.

The Pittsburgh-based industrial company is expected to announce management changes in New York on Tuesday, when it will also elaborate on plans for reviving the network. CBS is trailing Fox in key viewer demographics and has fallen further behind ABC and NBC this season.

Michael Jordan, the chairman of Westinghouse, is expected to disclose a new top management lineup that will include Peter Lund, the president of CBS; Willard Korn, the head of Westinghouse’s Group W broadcasting group, and Leslie Moonves, who will remain president of CBS Entertainment.

Some CBS managers have privately been critical of Westinghouse’s reluctance to name a new team before regulatory approval, which has triggered anxiety at high levels of the company. Some managers are certain to lose their jobs in the merger.

The five FCC commissioners unanimously approved the purchase despite the objections of two media watchdog groups, which were pushing for increased commitments from the new owner for children’s programming.

Several commissioners expressed the hope that Westinghouse will carry out a promise to increase children’s educational programming to at least three hours a week, from its current one hour.

“This is a historic event,” commission Chairman Reed Hundt said. “It’s also a very good day for kids.”

The FCC took pains to point out that its approval of the acquisition is not linked to Westinghouse’s pledge, which the company made in response to complaints by the United Church of Christ and the Center for Media Education.

Commissioner James H. Quello cautioned that to do otherwise would be to encourage outside groups to file petitions with the FCC as a means of forcing license applicants to carry particular kinds of programming.

Some citizens groups were disheartened that the commission did not link license approval to the airing of more children’s educational programming. “I consider it a . . . setback for the FCC,” said Andy Schwartzman, director of Media Access Project, a Washington-based nonprofit group.

The combination of Westinghouse and the nation’s oldest broadcaster will bring together 39 radio stations and 16 television stations reaching 33% of American homes.

CBS shares closed Wednesday at $81.875 on the New York Stock Exchange, up 37.5 cents, while Westinghouse stock closed $16.125, up 25 cents.

Although the deal moved through the Washington regulatory mill faster than most transactions of its size, some critics complained that the FCC dragged its feet.

Initially, the deal stalled while the agency’s commissioners squabbled over whether to link FCC approval of the transaction to Westinghouse’s pledge to air more children’s shows. Later, approval was delayed by a federal budget impasse that closed much of the government for four days.

The FCC granted Westinghouse a record 18 waivers, 11 of them temporary, from rules limiting media concentration. Within a year, Westinghouse may own only 12 TV and 38 radio stations. It will have to unload either a television station or a radio station in Los Angeles, New York, Chicago, Philadelphia, San Francisco and Detroit. But it won authority to operate both television and radio stations indefinitely in Minneapolis, Boston and Washington.

However, Westinghouse will be able to keep all the combined CBS and Group W television and radio stations if Congress enacts pending legislation to deregulate the telecommunications industry.

The United Church of Christ and the Center for Media Education wanted the FCC to block the sale on the grounds that Westinghouse and CBS had done a poor job of serving children.

But in September, after Westinghouse said the new company would air up to three hours of educational children’s shows a week next season, the two groups withdrew their petition opposing the license transfer.

Shiver reported from Washington and Hofmeister from Los Angeles.