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.

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4 comments
Posted by Loggin Leon on March 29,2007 at 10:59 PM

I travel around 6000 miles a month and I enjoy being able to tune into the program(s) I like without interuption.

There are pluses to each provider, Sirius has some good programming but Stern has been over rated for the last decade, time has past.  Concentrate on their other offerings.  XM technology as far as receivers is definately in the lead. The merger will probably increase the cost, key thing is that the companies are failing individually due to lack of profits (ie. not enough subscribers per dollar invested) this should help keep price increase in check as they will need to attempt continued increase in interest and subsequent subscriptions.  Should be an interesting year.  Long live Satellite Radio!

Posted by AndrewM on February 22,2007 at 1:48 PM
I am currently a Sirius subscriber. While this merge is good for the serious sports listener (giving them all the sports stations a satellite listener could ask for), I am cautious about flailing my arms in the air for joy. Price increases are evident at some point, how much of an increase is the question. Hopefully these companies will be kissing some "sirius" tail like Brando said.
Posted by RodneyG on February 21,2007 at 11:09 AM
It's a good thing.  I want satellite radio to work.  I'm not sure either company could make it alone.  I'll gladly pay a little more per month if they want to raise the price.  As long as they survive.
Posted by modsuperstar on February 21,2007 at 10:49 AM
This merger definitely makes the whole satellite radio much more attractive.  I've never liked the idea of picking one service.  They both had their strengths and weaknesses and neither felt like the total package.  I think the merger will definitely result in a better product overall.