XM Satellite Radio and SIRIUS Satellite Radio agreed to an all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.
The combination creates a nationwide satellite radio provider with combined 2006 revenues of approximately $1.5 billion and approximately 14 million combined subscribers. Mel Karmazin, currently CEO of SIRIUS, will become CEO of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company.
The companies cited several reasons for the merger, including synergies for content programming. They also hope 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.
In regard to potential anti-trust concerns, the companies said that 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.
http://www.sirius.com
http://www.xmradio.com
