Nielsen Holding, known for its television viewership ratings, agreed to pay $1.26 billion to acquire its radio counterpart, Arbitron.

The $48-per-share purchase price represents a 26 per cent premium to Arbitron’s Monday closing price on the New York Stock Exchange. The shares were trading just below the offer price in premarket trading yesterday when the deal was announced.

Ratings – Nielsen’s in TV and Arbitron’s in radio – determine how much advertisers are charged to run commercials during TV programmes and radio listening hours. The higher the rating the more expensive the commercial spot.

“It’s a huge deal for Nielsen,” said Edward Atorino, an analyst with Benchmark Co. “It adds radio, which is a huge market.” Nielsen said that with Arbitron it plans to expand its “Watch” measurement that keeps tabs on consumer viewing and listening habits across multiple screens such as TV, computers and mobile devices.

“Arbitron will help Nielsen better solve unmeasured areas of media consumption, including streaming audio and out-of-home,” Nielsen chief executive David Calhoun said.

“The high level of engagement with radio and TV among rapidly growing multicultural audiences makes this central to Nielsen’s priorities.”

The acquisition will add about 13 cents per share to Nielsen’s adjusted profit a year after the deal is completed, the company said.

Arbitron reported revenue of $445 million for the 12 months ended September 30th. Nielsen, which provides a large range of marketing and consumer information services apart from TV ratings, has a financing commitment for the total purchase price. The transaction has been approved by the boards of both companies.

Nielsen said on Monday it will partner with Twitter to publish a new set of ratings that measure chatter on Twitter about TV programming. – (Reuters)