XM – Sirius merger might come today

Posted By on February 19, 2007

sirius xm mergerAccording to the holiday (Presidents Day) business news , Sirius and XM satellite radio companies are set to announce their merger today. Industry experts have been anticipating this announcement for some time now and according to an article in the NYPost, the “two sides were locked in negotiations over the weekend trying to hammer out a final agreement with an eye toward going public with the merger today in Washington, D.C., where XM is based.”

Anti-trust problem loom as gaining approval could take 15 months, and there is always the possibility of other fine point last minute problems derailing the merger. Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. The deal would benefit XM subscribers in bringing them exclusive Sirius content, such as Howard Stern and Nascar, while the Sirius folk would gain XM’s Oprah Winfrey, Bob Dylan and Major League Baseball. The article suggest that more importantly the “deal would also save the two companies nearly $7 billion annually.”

Shares of both companies are low considering that the market has been up substantially over the past year. Shareholders from both companies could use some cost savings cheer would appreciate not having to compete head to head over content and in subscription pricing. Unfortunately for subscribers, a merger offers no competition to keep subscription prices in line and might end up costing more than they initially expected to pay?

EDIT 02/19/2007: Its official — The two U.S. satellite radio providers announced a merger of equals on President’s Day. Under the terms of the agreement, XM shareholders will receive 4.6 shares of Sirius stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50% of the combined company.


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