Just in from the Wall Street Journal (3:42 pm)
Satellite-Radio Rivals XM And Sirius Agree to Merge
By DENNIS K. BERMAN and SARAH MCBRIDE
February 19, 2007 3:42 p.m.
XM Satellite Radio Holdings and Sirius Satellite Radio Inc. are merging into a single satellite-radio giant, the companies announced Monday.
Mel Karmazin, currently chief executive of Sirius, would be chief executive of the combined company, and Gary Parsons, currently chairman of XM, would be chairman of the new entity. The companies would merge as equals, with both companies getting the same share of the new company. The company would keep offices in both New York, where Sirius is based, and Washington, D.C., home to XM.
The merger may have hurdles getting approved by antitrust and communications regulators. Already Federal Communications Commissioner Kevin Martin has signaled some resistance to a coupling of the two services, which feature rival menus of sports, music, and talk-radio programming.
But the two sides are likely to argue that the proliferation of Internet-based radio, digital music players, and new HD-radio formats creates a vigorous competitive market for such media. Indeed, in surveys, consumers rarely can differentiate between the two companies, which have spent hundreds of millions trying to appeal to them.
Word of the talks was first reported by The New York Post.
As of Friday, Sirius carried a market capitalization of $5.2 billion. XM was valued at about $3.8 billion. Word of the talks was first reported by The New York Post.