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Monday, February 19, 2007
XM and Sirius satellite radio have both just announced their pending merger. Both companies, “Have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.” Mel Karmazin, Sirius’ current CEO, will continue with his title of the newly merged company. Gary Parsons, XM’s Chairman, will also continue with is title and be chairman of the combined company. Both companies will continue to operate as separate entities until the merger completes at which time a new central location and combined programing will be determined.
SvenOnTech was told that, ” The combined company is committed to consumer choice, including offering consumers the ability to pick and choose the channels and content they want on a more a la carte basis. The combined company will also provide consumers with a broader selection of content, including a wide range of commercial-free music channels, exclusive and non-exclusive sports coverage, news, talk, and entertainment programming.”
Interesting development for sure. It has been well known that Sirius was hurting financially while XM has yet to even make a profit. Combining the two companies will help; however, will it pass FCC scrutiny? Most likely since it allowed all the Baby Bells to become basically what it broke up in 1981. The pick-and-chose channel aspect is very appealing to me. The one question I’ve got to ask though, is what will my wife and I do? She has XM and I have Sirius. Will we both need new receivers? Doubt it, but it’ll be interesting to see how the two resolve this technical aspect of the merger.