Sirius XM to buy Pandora in $3.5 billion streaming push

Galtero Lara
Setiembre 24, 2018

Today it was announced that SiriusXM will be buying Pandora in an all-stock deal worth $3.5 billion.

Pursuant to the agreement, the owners of the outstanding shares in PANDORA that SIRIUSXM does not now own will receive a fixed exchange ratio of 1.44 newly issued SIRIUSXM shares for each share of PANDORA they hold.

Previous year also saw a different veteran of both the online radio and satellite radio industries pour a whopping $480 million into Pandora as a "strategic investment". There are now 36 million subscribers to SiriusXM with another 23 million will have tried out trial offers by the end of the year. But it also appeared to leave open the possibility of a shift, saying there would be "no immediate change in listener offerings". SiriusXM and Pandora have competed for business.

Broadcast radio, which has been feeling the same pressure from streaming, will now also have to fend off the combined strength of SiriusXM and Pandora. After the deal is finalized, Pandora and SiriusXM will continue to operate as independent brands and services. The company believes it can create "cross-promotion opportunities" through the acquisition and build "unique audio packages" that can work across both services.

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The launch of Pandora in 2000 was revolutionary for introducing music fans to new artists, creating playlists based on a song or artist of an individual's choosing. "Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms", Jim Meyer said.

"The addition of Pandora diversifies Sirius XM's revenue streams with the U.S.'s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the auto even further".

The merger agreement provides for a "go-shop" provision under which PANDORA and its Board of Directors may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement.

Shares in Pandora, which has posted losses for at least the past eight quarters, rose 6.5 percent to $9.68 in early trading, slightly below an offer value of $10.05 based on Sirius' Friday closing price.

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