Breaking Gizmo News: Sirius, XM Merge Official
It's been rumored for days, and now it appears the merge between XM and Sirius Satellite Radio is official. Although roadblocks have stalled proceedings for a while, the agreement was reached courtesy of a $13 billion deal that includes a net debt of some $1.6 billion.
While XM currently holds more subscribers, Sirius possesses a larger market share and will subsequently have a bigger piece of the pie in future business. In addition, Sirius CEO Mel Karmazin will take the lead post-merge.
Shareholders in XM will receive an exchange ratio of 4.6 Sirius common stock shares for each of those they own in XM. In total, shareholders in XM and Sirius will split the company, 50/50.
The merger means that 14 million subscribers now fall under just one corporation. It should also mean an exciting new boon of formerly competitive programming, an attraction that may just rope in listeners who've been sitting on the fence. Oprah AND Howard Stern? Where do I sign up?
Although we assume the merger will mean a greater listening lineup, it may not be so grand for the consumer. Without direct competition, the newly formed company could certainly work against public interest in regaining lost profits. With that said, both XM and Sirius will certainly need to kiss consumer tail for the time being.