Rumours have been flying around for over a year, but it was made official yesterday that satellite radio giants XM and Sirius are about to merge. According to the agreement, XM shareholders will receive 4.6 shares of Sirius stock for each share of XM they own. XM and Sirius shareholders will each own about half of the combined company, which is said to have an enterprise value of $13 billion. Says Mel 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." Karmazin is Chief Executive of Sirius, and will head the new company while XM's Gary Parsons will become chairman. Initially, Karmazin denied the reports of a merger in progress, and later admitted that it wasn't out of the question if the price was right.One benefit to users of satellite radio is said to be a more customized approach to content selection- allowing users to choose their mostly commercial free services on a more "a la carte" basis. Since the announcement, share prices of both companies has increased, though the merger still needs to be approved by shareholders and federal antitrust regulators.
Satellite radio pioneers Sirius and XM merge