Sirius & XM Agree to Merge!

NewsGuy · Sirius & XM Agree to Merge!

The nation’s two largest satellite radio services, XM and Sirius, announced this afternoon that they planned to merge.

The announcement ended months of speculation about whether the two companies would go ahead with a combination, but immediately raised questions about possible antitrust issues.

Under the terms of the deal, Sirius Satellite Radio would acquire XM Satellite Radio Holdings for stock valued at about $4.6 billion, based on Friday’s closing prices.

XM shareholders would receive 4.6 shares of Sirius stock for each share of XM they own. XM stock closed on Friday at $13.98 a share; Sirius closed at $3.70 a share. Based on those prices, XM shareholders would be receiving a 22 percent premium for their shares, or $17.02 a share. Both stocks edged higher on Friday as speculation about a deal circulated.

Mel Karmazin, the chief executive of Sirius, who has been a proponent of a merger, would become chief executive of the new enterprise, while Gary Parsons, currently chairman of XM, would become the chairman of the combined company.

The companies said in a joint statement that they expected the merger to be completed by the end of the year.

Before it can go ahead, however, the deal must be approved by shareholders of both companies and by the Federal Communications Commission.

Regulatory approval, in particular, is far from certain. Under the terms of their operating licenses, XM and Sirius are prohibited from ever owning the other. But the commission could yet agree to waive that rule and open the door for a merger to take place.

Last month, the F.C.C.’s chairman, Kevin Martin, pointed out that such a merger would run afoul of the current regulations. But he also said that if such a deal were proposed, the commission would consider it — a suggestion that a merger is not out of the realm of possibility.

A commission spokesman declined to comment this afternoon on the potential pairing of XM and Sirius.

Even if the deal does not face resistance from the F.C.C., it is likely to encounter opposition elsewhere. The National Association of Broadcasters, a trade association for television and radio stations, is already speaking out against a merger.

“In coming weeks, policymakers will have to weigh whether an industry that makes Howard Stern its poster child should be rewarded with a monopoly platform for offensive programming,” the group said. “We’re hopeful that this anticonsumer proposal will be rejected.”

NY Times

NewsGuy

WTF? NOBODY HAS A COMMENT ABOUT THIS???????????????????????????

TOKER

It's all good. Don't care much. Mel is going to lead the future and that is a good thing. Little concerned about Bubba and his contract. The whole bring in subscriber thing keeps em'a little closed minded. Need to understand what is going to be the future. It's Radio.

pfa

Predictable, but both 'sides' are claiming "victory" in this merger. But it seems Sirius is the stronger company...

It's bad from a competetive stance, but necessary for both Sat companies' health (cut employees by maybe half). I think it may be unecessary hand-wringing, though, as in a few years it is projected that ANY Sat content will be downloadable from the net via an ever-increasing variety of receivers.

But it is especially satisfying that O&A fans are now 'paying' Howard's, Bubba's and Ferrall's salaries, and that the clones wil have to 'work' with their arch-enemies.

fatboopy

what will happen to the internet feed will there be double the fun or will it stay as it is. i subscribe sirius internet radio as thats all we can get over here will you have access to more channels?

NewsGuy

From what Mel said when he was on Howard's show, it sound like Sirius was looking for towards being a content provider for various formats, as opposed to being soley a satellite radio retailer.

admin

It will be strange. Will O&A and Stern ever become friendly or will the old rivalries explode? Who knows how long it will take to get it all in sync though....