In a proposed $13 billion deal, XM Satellite Radio Holdings Inc. (XMSR) and Sirius (SIRI) have announced that they want to merge after months of rumors circulating in the media.
With the current rules in place, this wouldn't be allowed to happen, as the satellite radio licenses don't allow more than one company from owning them.
Last month Federal Communications Commission Chairman Kevin Martin hinted that those existing rules are open to be changed, paving the way for the potential merger to happen. Still the deal will come under scrutiny and is not absolutely guaranteed that it will be allowed.
If the deal is allowed to go through, it would create a customer base of 14 million subscribers. Along with the two companies becoming a worth $13 billion combined, it would also incur $1.6 billion in net debt.
The terms of the deal would have XM stockholders receiving 4.6 shares of Sirius shares for every XM share they hold.
According to analyst estimates, the two companies combined for $1.5 billion in revenue for 2006.
Sirius CEO Mel Karmazin would be the CEO of the new company, while current XM chairman would remain in that same role in the combined company. XM CEO Hugh Panero may be out as it was said he will stay in that role if and when the deal closes.
» XM and Sirius Plan to Merge from IndianPad
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Tracked on: February 19, 2007 3:42 PM | Permalink to Trackback