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SubjectSirius buys XM in satellite radio merger -
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Posted byRAM MAN
Posted on3/24/08 8:29 PM

The U.S.’s two satellite radio operators, Sirius Satellite Radio and XM Satellite Radio Holdings announced Monday they plan to merge, pending a potentially difficult approval process.

The all-stock deal will see XM shareholders receiving 4.6 shares of Sirius stock for each XM share they own. The new company would be worth $13 billion, based on the companies’ estimates, although neither company has ever turned a profit. Sirius and XM combined lost over a billion dollars last year on total revenues of about $1.5 billion.

Because the two are the only companies licensed by the U.S. Federal Communications Commission to offer satellite radio services, the merger may face regulatory opposition over creating an industry giant that would be hinder competition.

Sirius CEO Mel Karmazin will become the new company’s CEO, with Gary Parsons, currently XM’s chairman, set to become its new chairman. Executives from both companies will continue in their present roles until the deal closes, expected by the end of 2007.

The two companies pioneered the concept of subscription-based radio services, delivered nationwide via satellite. Both Sirius and XM charge subscribers $12.95 per month for their services. Sirius surprised the radio world in 2004 when it signed shock-jock Howard Stern to a five-year, $100 million contract. Stern remains the network’s chief draw of more than 130 channels, which includes NFL game broadcasts and related talk shows. XM has about 160 channels and counts talk-show and entertainment titan Oprah Winfrey among its celebrities. XM claims 7.6 million subscribers, and Sirius 6 million.

1998 Dodge Ram Quad Cab (SOLD)
2000 Dodge Ram VAN 1500
1970 Plymouth Road Runner

Good luck on your project.

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