Sirius and XM Announce Intent to Merge
After months of rumors, Sirius Satellite Radio and XM Satellite Radio announced a definitive agreement to merge. The companies call the $13 billion deal a “merger of equals.” XM and Sirius shareholders will each own approximately 50 percent of the combined company.
The merger is subject to approval by both companies’ shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the Federal Communications Commission (FCC). Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.
XM and Sirius, who combined have approximately 14 million subscribers, will continue to operate independently until the transaction is completed. Together, they will work to determine the combined company’s name and headquarters location prior to closing.
Current Sirius CEO Mel Karmazin will become CEO of the combined company, while current XM Chairman Gary Parsons will assume that role with the combined company. The 12-member board of directors will include Karmazin and Parsons, four independent members designated by each company, and one representative from each of General Motors and American Honda.
Current XM CEO Hugh Panero will continue in his current role until the anticipated close of the merger. Further management appointments will be announced prior to closing.
“We are excited for the many opportunities that an XM and Sirius combination will provide consumers,” said XM’s Parsons and Panero in a joint statement. “The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the FCC first granted our satellite radio licenses a decade ago.”
“This combination is the next logical step in the evolution of audio entertainment,” said Karmazin. “Together, our best-in-class management team and programming content will create unprecedented choice for consumers while creating long-term value for shareholders of both companies. The combined company will be positioned to capitalize on Sirius and XM’s complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders.”