Entercom Communications Corp. is one step closer to being the largest radio company in the United States, although it might take a while to get there. The potential merger between Entercom and CBS' radio division is expected to create the second-largest radio company in the country, with iHeartMedia Inc. still holding on to the top spot.

As reported by Fortune, Entercom will be acquiring the radio division of CBS. The deal will be tax-free since the companies opted to execute the combination through a Reverse Morris Trust transaction.

With the merger, the radio division of CBS will no longer use the media company's brand and will instead transition to using Entercom. The combined company will be owned largely by CBS Radio shareholders, who will have 72% stake in it.

Chicago Tribune reported that CBS was initially planning to initiate a public offering of the radio division. The IPO plans had been cooking for months, but the media company decided to abandon it in favor of the combination with Entercom.

After the transaction has been completed, Entercom will be running several stations in 23 of the 25 markets. The deal will add 117 radio stations to Entercom's portfolio, according to reports.

By revenue, the combined company will be the second-largest as it would have $1.7 billion. The companies did not disclose how much Entercom will pay for the radio division of CBS.

Executives of both CBS and Entercom expressed optimism that the combination will be good for the two companies' shareholders as it would give them significant value. In addition, the combination is expected to result in a combined company whose operations fit well.

Entercom President and CEO David Field will continue to lead the company, while CBS Radio President and CEO Andre Fernandez will resign.

Jobs & Hire previously reported that CBS' "60 Minutes" hired media mogul Oprah Winfrey as a special contributor.