BREAKING NEWS! XM and Sirius to Merge!

[ragingfish]

Quote »HEAVENLY DEALSIRIUS, XM SET TO CONFIRM MERGER PLAN TODAYBy PETER LAURIAFebruary 19, 2007 -- Satellite radio operators Sirius and XM are expected to announce their long-awaited merger today, according to a source familiar with the deal.The two sides were locked in negotiations over the weekend trying to hammer out a final agreement with an eye toward going public with the merger today in Washington, D.C., where XM is based, this source said.Talks were still going on at press time and the deal could fall apart at any time. With antitrust issues of paramount importance, this source said lawyers for both companies were working overtime to fine-tune the language of the agreement and frame the discussion around the deal itself and not regulatory concerns.The transaction is expected to be structured as a merger of equals, but given Sirius' higher enterprise value, shareholders in the Mel Karmazin-led firm will likely come away with a larger percentage of a combined company.According to the source, XM Chairman Gary Parsons will retain that title in the combined entity, with Karmazin likely taking the CEO role. It is unclear what role, if any, XM CEO Hugh Panero will play.Combining Sirius and XM would result in a single satellite radio operator with more than 12 million total subscribers. A deal would also marry Sirius content, such as Howard Stern, Frank Sinatra and Nascar with XM's Oprah Winfrey, Bob Dylan and Major League Baseball.More important, analysts widely predict that a deal would also save the two companies nearly $7 billion annually.Karmazin and Parsons have been dropping hints since last summer about a possible tie-up, believing that competition from terrestrial radio, online radio and mobile music devices such as iPods have not only expanded the marketplace but also lowered the regulatory hurdles to a deal.In a note on Friday, Bear Stearns analyst Robert Peck speculated that Sirius and XM needed to move quickly before their window of opportunity closed.Gaining regulatory approval "could take up to 15 months; hence, we think any proposed deal needs to be announced by the end of March to close by mid-2008," Peck wrote.On Friday, XM shares hit their lowest point since early November while Sirius shares were approaching 52-week lows. Shares in both companies did trade on heavy volume and ended the session higher, with Sirius gaining 10 cents to close at $3.70 and XM jumping a dollar to $13.98.Source: http://www.nypost.com/seven/02...a.htmI'm in shock.I never thought it could happen!

[CAN-AWD-VIBE]

sweet i knew this would happen.... now all I have to do is wait til the technology is sorted out and then I can buy a new sat. radio

[drunkenmaxx]

fantasic, a monopoly. enjoy your competitive pricing while you can.

[ragingfish]

Quote, originally posted by drunkenmaxx »fantasic, a monopoly. enjoy your competitive pricing while you can.the minute they raise my rate even a single cent, i WILL cancel.

[tnpartsguy]

dangit.....and we just bought Sirrus radio's to be able to listen to Nascar. Grrrrr

[NSimkins]

Even if true (I've heard this dozens of times already over the past year), it would take over a year to even finalize, plus would need government approval.

[ragingfish]

Quote, originally posted by NSimkins »Even if true (I've heard this dozens of times already over the past year), it would take over a year to even finalize, plus would need government approval. True, yeah.The article states that IF they officially agree to merge now, it would take up to a year for the details and FCC issues to be worked out.While the talk of a merger has been in the news for a while now, this is the first I'm seeing of an actual agreement being reached, and the first I'm hearing that they are nearing an actual announcement.

[ColonelPanic]

Son of suck! I was not wanting this to happen. I agree 100% with Drunken, so long competitive pricing! I'll dump 'em if they try to pull any crap. I hope for the customer that the government steps in on this one.

[silvrhawk7]

Not good.....Not Good

[SeattleJeremy]

http://www.msnbc.msn.com/id/17228226/ http://money.cnn.com/2007/02/1...21914holy crap, this is bad.

[NSimkins]

Definitely interesting... many pro's and con's... one pro I see is the consolidation of the satellite bandwidth to provide superior sound quality as well as other cool data/video services (expanding what is already available).It will be interesting to see how this plays out, if at all. All I know is that satellite radio sure makes my driving/road trips very enjoyable.

[NSimkins]

Done deal!http://biz.yahoo.com/prnews/07....v=75

[VivaVibe]

Well, don't get too excited. I read that the Feds have already said they would not allow them to merge regardless of their deal. And their original license(s) was only granted with the condition that they could not merge in the future.

[ZubenElGenubi]

CNN's picked it up:http://money.cnn.com/2007/02/1...21914Also see this article:http://money.cnn.com/2007/01/1...11017The argument for the merger is strictly for shareholder value. The effect on consumers would be disasterous. Here's one of those cases where the FCC and FTC should step in and stomp out the sparks.With one provider, you'd see pricing go to a multi-tiered format, not unlike cable or satellite is now. And the prices would be sure to go up.

[tnpartsguy]

Quote, originally posted by VivaVibe »Well, don't get too excited. I read that the Feds have already said they would not allow them to merge regardless of their deal. And their original license(s) was only granted with the condition that they could not merge in the future.They can let them merge, or watch them die.Between mp3 players, and HD Radio, subscription radio service has to do SOMETHING, or it's going to become a dinosaur. I like some of XM's stuff, and some of Sirrius. I don't like enough of EITHER to keep 2 subscriptions going year after year. I hate that NASCAR greeded up and went to Sirrius. I also hate that XM is involved with Clear Channel. I hope the FCC steps out of this, and allows the merger, either that, or XM and Sirrius radios will one day be an electronic oddity, sorta like a 4-track tape player.Below me, CP is saying the merger is bad for competion, I disagree; I think it's Sat Radio, Vs HD Radio, Vs Broadcast Radio, Vs CD's/MP3's.

[ColonelPanic]

Son of suck.... again!So, am I reading this right and this means CRAP CHANNEL, who turned commercial radio into the toilet it is today, is no longer involved with XM?Quote, originally posted by the yahoo article »With that in mind, industry leader Clear Channel Communications agreed to sell out to a group of private equity firms.Or, am I reading something wrong? That makes me dislike XM a little less if Clear Channel won't be in the mix. (I'm sorry guys, I tried the online trial for XM and I just think Sirius has better content for me.)Anyway, I wonder if I am under a contract with Sirius? Seriously, I'll cancel and spend the money on some sort of aux input for my car so I can plug in the iPod and start giving to public radio again. They don't care about the customers, all they care about are the shareholders. Down with the corporate machine! But hey, we'll get STERN and OPRAH! I just DON'T like this. A MONOPOLY is NOT good for competition... Ma bell back in the day, Micro$oft today.....

[ZubenElGenubi]

Quote, originally posted by ColonelPanic »So, am I reading this right and this means CRAP CHANNEL, who turned commercial radio into the toilet it is today, is no longer involved with XM?Or, am I reading something wrong? That makes me dislike XM a little less if Clear Channel won't be in the mix. (I'm sorry guys, I tried the online trial for XM and I just think Sirius has better content for me.)I think you're quoting the earlier CNN/Money article. I read that to mean that ClearChannel was selling out their commercial radio interests...not their XM participation.

[ColonelPanic]

(removed), so they're leaving commercial radio and bringing even more of their trashy programming (watered down / dumbed down content, thousands of minutes of commercials an hour / etc.) to satellite radio? They've already got commercials on their crappy stations on XM from what I gather. I'm definitely cancelling then. CC is evil, evil, evil! If I had a dollar for every good radio station they've flat out ruined!

[ragingfish]

Quote, originally posted by VivaVibe »Well, don't get too excited. I read that the Feds have already said they would not allow them to merge regardless of their deal. And their original license(s) was only granted with the condition that they could not merge in the future.True.But the actual verbiage was that the feds would not allow a single entity to hold both licenses.The question being posed among subscribers is, will one or the other sell off the second license.And has anyone heard how this will affect all existing hardware? And more importantly, what name will the new merged company operate under?

[KNINE]

Quote, originally posted by ColonelPanic »(removed), so they're leaving commercial radio and bringing even more of their trashy programming (watered down / dumbed down content, thousands of minutes of commercials an hour / etc.) to satellite radio? They've already got commercials on their crappy stations on XM from what I gather. I'm definitely cancelling then. CC is evil, evil, evil! If I had a dollar for every good radio station they've flat out ruined!Clue me in here. What's the problem with Clear Channel? I've been listening to Sirius for a while now, so I'm not too familiar with what's going on outside of Sirius.

[Kari]

Clear Channel buys up local radio stations and turns them into pre-packaged "formats" that never differ from market to market, and is fairly notorious for having a rather large amount of commercials per hour than other stations. Around here, they own most everything, and the few that they don't are sure to tell you who *does* own them...one even clearly states in their identifier that they are NOT a Clear Channel station.

[TJinPgh]

I'd say a bigger question is, assuming that they are allowed to merge, does that mean that they will be merging programming or not.If so, then, in all likelihood, everybody is going to need to buy all new equipment.Unless there are enough empty bands on one format or the other to incorporate the other's content, they'll either have to create new equipment with more channels or start putting existing channels on the chopping block.

[tnpartsguy]

another problem is satelite placement. XM's sat's (Rock and Roll; yes, those ARE the names of their sats!!) Are at a near equator orbit, whereas Sirruis's birds are at a northernly orbit. Should get a lot better coverage with 4 birds!!

[Kari]

XM's satellites are also in a geosynchronous orbit, whereas Sirius' are not. XM has 2, and Sirius has 3. I also think Sirius has one more up there that they aren't using.

[KNINE]

Thanks, Kari. I don't know who owns our local stations. I never listen to them. I just hope that if XM and SIRIUS do merge, they don't alter the programming too much. I switched from XM to SIRIUS because I liked SIRIUS' programming better. And I just bought my new stereo for my Vibe, so they better not change equipment! I'm thinking not, because they should continue to operate on the same frequencies.

[ragingfish]

This was in my email this morning...Quote »February 20, 2007Dear XM Radio Subscriber:We want to share with you some exciting news: Yesterday, in Washington DC, we announced XM Radio will be merging with Sirius Satellite Radio to form the premier digital audio service.The merger will create a satellite radio company that will provide consumers across the country with more and better premium radio programming. The combined company will be able to compete better in what has become a very complex and dynamic entertainment market.Where today our exclusive contracts mean you had to choose between baseball and football or Oprah and Martha Stewart, the new company will seek to ensure that in the future, you will be able to access both companies' programming. And, once we are fully integrated, those of you who have factory-installed satellite radio will no longer be limited to the programming provided by the exclusive satellite radio service chosen by their car manufacturer.This merger should be completed in late 2007 or early in 2008. Throughout the year, we will provide updates on how the merger is progressing and information will be available at our website, http://www.xmradio.com.Between today and the merger date, as well as during the period immediately after the merger date, all of your services will remain the same. The channel lineup, the customer service number, the great music technology, and the XM Radio web site will all remain unchanged and there will be no disruption to service. But, if you have questions, information will be available and maintained on our website, and you can contact our Listener Care team at 800-XMRADIO, with questions and concerns.XM Radio continues to be committed to providing you the highest quality audio entertainment and customer service available today. After the merger, our new company will be able to offer you the most exciting listening experience in radio.Sincerely,Hugh PaneroCEO, XM Satellite RadioThat says to me somehow they are going to maintain both licenses, and broadcast the same programming on both systems...Very interested to see how the FCC deals with this.Also found this on XM's site:Quote »How will the merger affect consumers?The merger will ultimately help to increase the number of programs available to all subscribers. In addition, after a transition period, the companies want to use their expanded channel capacity to offer enhanced services, and even more diverse programming.Where today our exclusive contracts mean you have to choose between baseball and football or Oprah and Martha Stewart, the new company will seek to ensure that in the future, you will be able to access both companies' programming. And, once we are fully integrated, those of you who have factory-installed satellite radio will no longer be limited to the programming provided by the exclusive satellite radio service chosen by their car manufacturer.Will current XM subscribers need to buy new radios?No.Will there be any immediate change to my monthly subscription fee?No.Will a merged service raise its monthly subscription fee?In order to attract more subscribers, Satellite radio has strong incentives to keep prices low, particularly in the face of competition from many other audio entertainment providers - including free "over-the-air" AM, FM, and HD radio, Internet radio, music subscription services, iPods, CD players, and cell phones, as well as growing new technologies and services like MediaFLO, 3G, and WiMax.How will current subscribers transition to a new merged service?Both companies are committed to ensuring the smoothest possible transition for current subscribers, and there will not be interruptions in service. We will seek to integrate the companies and technology platforms as quickly as possible, while supporting both XM and Sirius customers.Will the merged company add commercials to its currently commercial-free music lineup?There are no plans to do so. Both companies see the value in commercial-free music as a major attraction to subscribers.What will the merged programming lineup look like?Once fully integrated, the new company plans to provide customers with access to a greater portfolio of rich and diverse programming.In addition, a merger would ultimately allow the new company to eliminate duplicative music programming and free up bandwidth, which could be reallocated to enable them to offer exciting new services and expanded public interest programming, including more news and information. Additionally, bandwidth could be re-deployed to enrich underserved markets and attract more diverse segments.When will XM subscribers be able to listen to Sirius content on their radio?It's too early in the process to address timing. Ultimately, the merger can help to increase the number of programs available to consumers.Will there be any immediate changes to any XM channels? Will my favorite channels go away? Will my favorite XM personalities continue to do their show?It's too early in the process to address timing. Ultimately, the merger can help to increase the number of programs available to consumers.

[KNINE]

Yeah, well I got this from the CEO of Sirius, so I guess that makes me special too! To: SIRIUS Subscribers Today is a very exciting day for SIRIUS customers. As you may have heard, SIRIUS Satellite Radio and XM Satellite Radio are merging to form the nation's premier audio entertainment provider. This combination of our two offerings will benefit you - our loyal listeners. As a single company, we'll provide superior programming to you every day with the best of both SIRIUS and XM. Currently, XM and SIRIUS broadcast a wide range of commercial-free music channels, exclusive sports coverage, news, talk, and entertainment programming. Howard Stern. Oprah and Friends. The NFL. MLB. NBA. ESPN. CNBC. Fox News. Additionally, the combined company will be able to improve existing services such as real-time traffic information and rear-seat video as well as introduce new ones. After shareholder and regulatory approvals, we anticipate that the combination will be finalized by the end of 2007. Until then, both companies will continue to operate independently. We will continue to provide you with the uninterrupted service - as well as the outstanding customer support - that you have come to expect and enjoy from SIRIUS. We do not anticipate any changes in your service during the merger process, however, please call our customer care team on 1- 888-539-7474 should you have any questions. We look forward to the many benefits this combination will offer and continuing to make your listening experience an enjoyable one - offering more of the Very Best Radio on Radio. Stay tuned, Mel Karmazin, CEO

[new05vibeowner]

I've been a Sirius subscriber for the last couple of years, and my wife's uncle is a jock on channel 5, so I'm kind of torn on this issue.Hopefully, they'll keep the best of both companies and give us subscribers a great product, but when I hear "merger of equals", I think DaimlerChryslerI just hope that they don't screw up both XM & Sirius when this goes through, but I am glad that I will be able to hear MLB on Sirius.Also, this was posted on Sirius' website today:SIRIUS and XM to Combine in $13 Billion Merger of EqualsProvides Consumers with Enhanced Content, Greater Choices and Accelerated Technological Innovation Enables Satellite Radio to Better Compete in Rapidly Evolving Audio Entertainment Industry Extraordinary Value Creation for Shareholders Mel Karmazin to Serve as Chief Executive Officer and Gary Parsons to Serve as Chairman of Combined Company WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- XM Satellite Radio (Nasdaq: XMSR - News) and SIRIUS Satellite Radio (Nasdaq: SIRI - News) 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.