XM/Sirius about to merge

[Reds Fanatic]

Not sure what this will eventually mean to all of us subscribers but it looks like the long rumored XM/Sirius merger may be happening.

http://abcnews.go.com/Business/story?id=2887179

Feb. 19, 2007 — ABC News has confirmed reports that two satellite radio providers XM and Sirius will announce a long-anticipated merger today.

The two companies worked over the weekend to finalize a plan that is expected to be structured as a "merger of equals," although ABC News has learned the plan calls for Sirius CEO Mel Karamzen to run the new company.

The merger would require regulatory approval as well as anti-trust scrutiny.

Kevin Martin, chairman of the Federal Communications Commission, reportedly said last month that a merger could not be approved under current FCC regulations.

[Yachtzee]

If it means I get MLB and NFL over Satellite Radio, I say great!

[Joseph]

I have XM and hope this doesn't mean upgrading my hardware since I JUST did it two weeks ago.

Other than that, all the better in my eyes.

[Yachtzee]

Originally Posted by Joseph

I have XM and hope this doesn't mean upgrading my hardware since I JUST did it two weeks ago.

Other than that, all the better in my eyes.

I have a feeling that with all the factory installed satellite radios, they'd probably create a merged channel line-up and continue to broadcast to existing equipment. Imagine how much it would stink if you owned a car with factory XM or Sirius and you had to have the radio ripped out and replaced to get the new content. Not exactly a good way to hold on to subscribers.

[Reds Fanatic]

They have now officially announced the merger. If appoved could be completed by the end of 2007.

WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- XM Satellite Radio (NASDAQ: XMSR) and SIRIUS Satellite Radio (NASDAQ: SIRI) today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company. The new company's board of directors will consist of 12 directors, including Messrs. Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the Chief Executive Officer of XM, will continue in his current role until the anticipated close of the merger.

The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters location prior to closing.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts' consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:

* Greater Programming and Content Choices -- The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings.

* Accelerated Technological Innovation -- The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment.

* Benefits to OEM and Retail Partners -- The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively.

* Enhanced Financial Performance -- This transaction will enhance the
long-term financial success of satellite radio by allowing the combined
company to better manage its costs through sales and marketing and
subscriber acquisition efficiencies, satellite fleet synergies, combined
R&D and other benefits from economies of scale. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion.

* More Competitive Audio Entertainment Provider -- The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers' attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. In addition to existing competition
from free "over-the-air" AM and FM radio as well as iPods and mobile
phone streaming, satellite radio will face new challenges from the rapid
growth of HD Radio, Internet radio and next generation wireless
technologies.
"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "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. The combined company will be positioned to capitalize on SIRIUS and XM's complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.

SIRIUS's financial advisor on the transaction is Morgan Stanley and Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal counsel. XM's financial advisor on the transaction is J.P. Morgan Securities Inc. and Skadden Arps, Slate, Meagher & Flom LLP; Jones Day; and Latham & Watkins LLP are acting as legal counsel.

Conference Call and Webcast Information

The companies will hold a joint conference call and webcast on Tuesday, February 20, 2007 at 8:30 AM ET to discuss this announcement. The conference call can be monitored by dialing 800-573-4840 within the U.S. and 617-224-4326 for all other locations, passcode 29490052. The webcast can be accessed at http://www.sirius.com/ and http://www.xmradio.com/ as well as on their satellite radio services by tuning to SIRIUS channel 122 and XM channel 200. The webcast will be archived at http://www.sirius.com/ and http://www.xmradio.com/

[WMR]

Will the new company be called XM or Sirius?

[Red Leader]

Originally Posted by WilyMoROCKS

Will the new company be called XM or Sirius?

IM Sirius.

[Joseph]

Originally Posted by Red Leader

IM Sirius.

Boooooo



I'd wager they are called Sirius because that was the stocks the XM holder would be getting if I read correctly in one of those articles.

[WMR]

Bababooey

[Red Leader]

Get Yahoo involved and we could be looking at the next

Yahoo Sirius.

*runs off stage*

[jmcclain19]

I guess this was inevitable at some point.

I just wonder in the very near future if the new company will decide on one set of technology (XMs, Sirius, or a new third type) and tell everyone going forward they must use this type.

I just went thru the same thing with Cingular & AT&T. I had just spent some cash upgrading to a PDA phone when a few weeks later I heard about the merger. Cingular said all the right things at the begining, that all the old phones would work on the new system. But when it came contract re-up time, every AT&T customer like myself was forced to make a decision - get a new free entry level phone or pay big bucks once again for a new pda phone - as the AT&T phones would not be allowed to be re-upped.

Quite the 180 - but you're stuck at that point.

[KronoRed]

I say good on this deal, having college football split across 2 networks was a deal breaker.

[Caveat Emperor]

Originally Posted by WilyMoROCKS

Bababooey

They don't measure time in increments small enough to describe how fast I'll smash my MyFi on the ground if Karmazin and Stern boot Opie & Anthony or Ron & Fez off the new combined service.

[KronoRed]

Originally Posted by jmcclain19

I just went thru the same thing with Cingular & AT&T.

Get ready for an extra kick when your new Cingular phone starts saying AT&T

[WMR]

Originally Posted by Caveat Emperor

They don't measure time in increments small enough to describe how fast I'll smash my MyFi on the ground if Karmazin and Stern boot Opie & Anthony or Ron & Fez off the new combined service.

Hahaha... It will be interesting to see how it shakes out... Stern has always been pretty unabashed in his descriptions of O&A as hackey and lame poorly-executed impressions of the style of radio he pioneered.