Satellite-radio companies Sirius, XM to merge
4:34 PM EST February 19, 2007
WASHINGTON (MarketWatch) -- Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. announced Monday that they are merging to create a $13 billion company, which will be headed by the current chief executive of Sirius.
The combined company, which feature rival menus of sports, music, and talk-radio programming, is certain to face tough scrutiny from federal regulators. Just last month, Federal Communications Commission Chairman Kevin Martin said that his agency's rules wouldn't permit such a deal. See archived story.
If approved by shareholders and regulators, investors in XM would get 4.6 shares of Sirius common stock for each XM share they own. The $13 billion deal includes debt of about $1.6 billion.
Sirius, headquartered in New York City, is the home of "shock jock" Howard Stern, lifestyle maven Martha Stewart and other on-air personalities.
Sirius Chief Executive Mel Karmazin will run the combined company, which will have 14 million customers. The new name has yet to be determined.
XM Chairman Gary Parsons will be the new chairman; XM's current chief executive, Hugh Panero, will stay on until the merger is completed. XM is headquartered in Washington, D.C.
In a statement, Karmazin called the merger "the next logical step" in audio entertainment's evolution.
"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," he commented.
The companies also said that the merger would "enhance the long-term financial success of satellite radio," and that analysts had pegged "estimates of the present value of cost synergies ranging from $3 billion to $7 billion."
Shares of XM closed at $13.98 on Friday, while shares of Sirius finished Friday trading at $3.70. U.S. markets are closed Monday for Presidents Day.
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4:34 PM EST February 19, 2007
WASHINGTON (MarketWatch) -- Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. announced Monday that they are merging to create a $13 billion company, which will be headed by the current chief executive of Sirius.
The combined company, which feature rival menus of sports, music, and talk-radio programming, is certain to face tough scrutiny from federal regulators. Just last month, Federal Communications Commission Chairman Kevin Martin said that his agency's rules wouldn't permit such a deal. See archived story.
If approved by shareholders and regulators, investors in XM would get 4.6 shares of Sirius common stock for each XM share they own. The $13 billion deal includes debt of about $1.6 billion.
Sirius, headquartered in New York City, is the home of "shock jock" Howard Stern, lifestyle maven Martha Stewart and other on-air personalities.
Sirius Chief Executive Mel Karmazin will run the combined company, which will have 14 million customers. The new name has yet to be determined.
XM Chairman Gary Parsons will be the new chairman; XM's current chief executive, Hugh Panero, will stay on until the merger is completed. XM is headquartered in Washington, D.C.
In a statement, Karmazin called the merger "the next logical step" in audio entertainment's evolution.
"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," he commented.
The companies also said that the merger would "enhance the long-term financial success of satellite radio," and that analysts had pegged "estimates of the present value of cost synergies ranging from $3 billion to $7 billion."
Shares of XM closed at $13.98 on Friday, while shares of Sirius finished Friday trading at $3.70. U.S. markets are closed Monday for Presidents Day.
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