XM, Sirius satellite radios announce merger

MUMBAI: XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. until now rivals in the US satellite radio industry, have agreed to combine in a deal.

The shareholders of both companies will own approximately 50 per cent of the combined company. However, Sirius will be giving a substantial premium of $4.57 billion of its stock to XM shareholders.

Sirius chief executive Mel Karmazin will lead the combined company, and XM‘s CEO Hugh Panero will stay on only until the deal is closed. XM chairman Gary Parsons will continue in that role.


The deal announced on 19 February faces substantial regulatory hurdles in Washington, including a Federal Communications Commission provision that specifically forbids the two companies from combining. Analysts note, however, that the FCC could change the rule or allow an exception to it.

The merger would also have to meet antitrust approval from the Department of Justice. The companies are expected to argue that they compete not only with each other but also with traditional radio and a growing base of digital audio sources such as iPods, mobile phones and non-satellite digital radio.

Investors and analysts have been speculating about this deal for months, and are hoping that the cost savings that would result would make up for softening retail demand for satellite radio units. Both services offer dozens of channels of talk and commercial-free music for monthly fees of about $13.

XM radio receivers can‘t receive signals from Sirius, and vice versa. But Karmazin and Parsons said in an interview that the companies are working on developing a receiver that could receive both signals. In the meantime, they said, assuming the deal goes through, the companies would make other arrangements to bring programming that‘s currently exclusive to one provider to listeners of the other, such as getting Major League Baseball games - currently only available on XM - to Sirius listeners.


"We will be taking every effort to find the best possible programming combination," Parsons said. While it‘s too early to say what the deal will mean for subscription prices, the merger could bring down the cost of providing service, but at the same time give the company more pricing power as the only U.S. satellite radio provider.

Neither XM nor Sirius have turned a profit yet due to heavy spending on programming lineups and subscriber bases. Both stocks declined more than 40 percent last year on concerns about their continued growth in subscribers.The combined company would have had about $1.5 billion in revenues in 2006 and about 14 million subscribers, they said. The companies said they would work together to decide on a new name and also to determine where it would be based. XM is based in Washington, while Sirius is based in New York.

The new company‘s board will have 12 members, including Parsons, Karmazin, four independent directors named by each company, and one representative each from General Motors Corp. and Honda Motor Co. A group representing radio companies, the National Association of Broadcasters, put out a statement Monday urging federal regulators to block the satellite radio deal.


Latest Reads
India, China to propel APAC, beat CAS Europe market share

APAC is expected to overtake the market share of Europe in future due to an increasing demand for digital TV set-up boxes in countries such as China and India. North America and Europe dominated the global CAS market in 2015. APAC region is estimated to mark a growth rate of 12.0 per cent CAGR...

Technology Hardware Set-top Boxes
India lucrative market for 4K UHD STBs: Grand View Research

Here’s a view on the demand for 4K or ultra high definition (UHD) set-top boxes (STBs) in India.

Technology Hardware Set-top Boxes
Infor appoints Dass as south Asian subcontinent V-P

Infor, a leading provider of business applications specialized by industry and built for the cloud, has appointed Ashish Dass as the vice president and managing director for the south Asian subcontinent. Infor software helps eliminate the need for costly customization through embedded deep...

Technology Software Applications
Siti & DishTV opt for Conax conditional access

The Essel group has been using Conax’s tech for sometime now for its Siti Network (earlier known as Siti Cable). Now the group has extended that partnership for another product for both Siti Network and DTH operator Dish TV India. This time it is for the cardless set top boxes that the two are...

Technology Hardware Set-top Boxes
Imagine Communications extends functionality of Selenio One unified transcoding platform to OTT

MUMBAI: Imagine Communications, empowering the media and entertainment industry through transformative innovation, today introduced a high-density adaptive bitrate (ABR) transcoding product built on Selenio One™, the company’s software-defined linear transcoding platform. Selenio One is designed...

Technology Hardware Components
DJI Makes Your Smartphone Smarter with the New Osmo Mobile

DJI, the world leader in creative camera technology, Thursday launched the Osmo Mobile, an extension for smartphones that turns them into intelligent, precision camera systems.

Technology Hardware Components
Prime Focus Tech gets funding from PE firm Ambit Pragma

MUMBAI: Prime Focus Technologies (PFT) – the technology offshoot of media services company Prime Focus - informed the Bombay stock exchange today that it had received its first round of funding from growth capital private equity fund Ambit Pragma.

Technology Software Applications
Three new products developed by C-DOT launched on its Foundation Day

Communications Minister Manoj Sinha today expressed the hope that 100,000 Gram Panchayats (GPs) will be connected through Optical Fibre Cable (OFC) by March next to set up a network infrastructure to serve the rural masses.

Technology Hardware Distribution
Genpact and BITS partner to build talent in the field of analytics

Genpact (NYSE: G), a global leader in digitally-powered business process management and services, today announced a partnership with premier technical education university Birla Institute of Technology and Science (BITS) for offering training programs in the field of analytics.

Technology Software Middleware

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories