Sirius Radio to merge with XM

Despite previous reports concerning the FCC denying XM and Sirius a chance to merge, the two U.S. satellite radio providers have announced that a merger would indeed take place in a stock-for-stock deal. The two sides were locked in negotiations over the weekend trying to hammer out a final agreement. Previous hints at a merger have been frequently brought up, but the recent blow from FCC seemed to have destroyed all hopes. Veteran media executive Mel Karmazin, currently Sirius CEO, will be CEO of the combined company, and Gary Parsons, now chairman of XM, will hold the same position in the new company. It is unclear what role, if any, XM CEO Hugh Panero will play. The newly born company will have an enterprise value of $13 billion, including $1.6 billion in net debt but with more than 12 million total subscribers. Under the terms of the deal, XM stockholders will get 4.6 shares in Sirius.

Reuters ended their short article with the (dreaded?) words "The deal will need regulatory approval".

Link: Forum Discussion (Thanks [bear])
News source: Reuters

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14 Comments

Hmmm, I am a Sirius subscriber because growing up in New Jersey I was pretty much raised with Howard Stern, so one, Howard is going to have a field day with this one. Two, I wonder what this means if anything for subscription prices and or needing a new unit?

wait this is a monopoly, since when can they allow a monopoly in a market that only had two players to start with?! ontop of that what about the receivers? if they merge they will probably want to consolidate broadcast formats and remove one of the two... then a lot of them are built into cars now to directly! what do those people do? and this can not be good for prices either, no competition...

I highly doubt if they merge they would just drop one or the other...
XMs and Sirius' satellite(s) are already up and broadcasting, so all they would need to do is take over what is sent to each satellite, and change the line ups for them, then XM and Sirius would carry the same channels

No point it taking down a satellite (unless its high maintenance)

I'm subscribed to XM radio and I don't know if I like the sounds of this. Unless they keep both services running simultaneously, you probably would have to purchase new hardware to be comparable with both services - not to mention a probable change in pricing scheme (tiered packages anyone)?

I for one, do not welcome our new satellite radio overlords.

if this possibly means having howard stern on both systems i'm going for xm... I've got a pioneer AVIC-N3 in my car and the sirius controls straight up suck (DEI needs to make a better interface for their units). XM controls are so much better... and the sound quality is better. Also... XM & Sirius are releasing satellite video and radio units soon. Can't wait for that.

Both XM and Sirius are loosing money big time. So what would you prefer? That both of them shutdown their services or that they merge and offer the best of both world?

FCC would be stupid not to approve this. One is better than nothing at all.

The FCC allowed Sirius & XM to operate independently because they promised never to merge in the first place.
If they approve it, there may be repercussions.

PS: How does one "loose" money?

Is money normally tight?

L-O-S-E folks, pretty simple, don't add letters!)

Here is a solution. Have the FCC standardize the broadcasting methods (similiar to AM and FM) and have the content providers throw their own satellites into the air just like how the AM/FM radio stations provide their own equipment to broadcast signals. No reason to have a middle man - AM and FM worked well without it.

I am not understanding this lack of competition. I don't have to pay for satellite radio, nor am I required to listen to it. I can listen to AM or FM, various netcasts, tapes, CDs...

If this were say phones and I had no alternative to Ma Bell owning everything, I could see being upset. If this was computing in the modern workplace and had no alternative to using an OS and Office package from one company, I could see calling it a monopoly. If they were ending broadcast television and I had to have cable from only one source, sure. But this is just an extra stream of entertainment. If they want to consolidate to stay profitable and in business, I have no problem with that. If they charge more than they do now, I don't need to pay.

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