The invention relates to an apparatus for improving a stereo audio signal of an FM stereo radio receiver. The apparatus comprises a parametric stereo (PS) parameter estimation stage. The parameter estimation stage is configured to determine one or more parametric stereo parameters based on the stereo audio signal in a frequency-variant or frequency-invariant manner. Preferably, these PS parameters are time- and frequency-variant. Moreover, the apparatus comprises an upmix stage. The upmix stage is configured to generate the improved stereo signal based on a first audio signal and the one or more parametric stereo parameters. The first audio signal is obtained from the stereo audio signal, e.g. by a downmix operation in a downmix stage. The PS parameter estimation stage may be part of a PS encoder. The upmix stage may be part of a PS decoder.