The two United States satellite radio service providers, XM and Sirius, have declared that they will be merging, which is good news for consumers. XM Satellite Radio and Sirius Satellite Radio are combining into one business entity, which will merge all stocks and assets. The tax-free merger will unite the net worth of both companies, which will total $13 billion minus about $1.6 billion of debt. |
The combined number of subscribers for both XM and Sirius satellite radio services totals about 14 million, and the added number of subscribers in the merged company should be an advantage to consumers. Both XM and Sirius say that subscribers will have the ability to choose which channels they want and which they don’t with the new satellite radio service, rather than having to subscribe to all the channels at once. This will give consumers the ability to pay for the satellite radio channels they want, and forego the satellite radio channels they don’t really need.
“We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers,” said Gary Parsons and Hugh Panero in a joint statement. Parsons is Chairman of XM Satellite Radio and Hugh Panero is CEO of XM Satellite Radio.
“This combination is the next logical step in the evolution of audio entertainment,” said Mel Karmazin, CEO of Sirius Satellite Radio.
The new satellite radio company will be headed up by the current Chief Executive Officer of Sirius, Mel Karmazin. Hugh Panero, the Chief Executive Officer of XM, will continue with his current duties until the close of the merger. The Chairman of the new satellite radio company will be Gary Parsons, current Chairman of XM. Both Karmazin and Parsons will sit on the new company’s board of directors. The two will be joined by ten other business people, including representatives from GM and American Honda, and eight other independent members.
Both XM Satellite Radio and Sirius Satellite Radio will continue to be separate corporate entities until the end of the business transaction. The two companies must work together to figure out the name of the new merged business, as well as the location for the new corporate headquarters.
People who hold XM stock will get an exchange of 4.6 shares of Sirius stock in the merger for each share of XM stock. All shareholders of both XM and Sirius will now own about half of the merged corporation.
The XM and Sirius satellite radio merger will not be complete until it is approved by both company’s shareholders. The satellite radio services must also go through a regulatory review, and the merger must be approved by the Federal Communications Commission. XM Satellite Radio and Sirius Satellite Radio say the merger should go through by the end of 2007.
For more resources about Satellite Radio or about Sirius and especially about XM please review these links.
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