Breaking: XM and Sirius announce $13 Billion merger of equals!
Breaking…http://biz.yahoo.com/prnews/070219/nym038.html?.v=75
The two companies have announced that they are entering into a joint merger agreement worth about $13 billion, including net debt of $1.6 billion. XM shareholders will receive 4.6 shares of Sirius stock for each share they own, which will give them about 50% of the new company. As reported, Mel will stay CEO of the new company, Gary Parsons of XM will become chairman of the new company, and current XM CEO hugh panero will stay until the merger is completed. They will have a Conference Call tomorrow at 8:30a broadcast from both companies’ web pages, as well as Sirius channel 122 and XM channel 200.
They have not yet determined the new company’s name or headquarters yet. They have summarized these benefits:
* 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.
Articles on the site still only quote NY Post. by atlwxman
Perhaps you guys should make a forum for this on the site, there are going to be 100 threads all over the place about this... by bandwagon03
I don't think that the FCC will allow both SDARS licenses to be owned by one company. It's possible that part of the plan is to sell one of the licenses and the satellite infrastructure associated with it to another company. That would more than defray the cost of replacing the receivers that would be rendered useless. by Mr. Furious
It will be a year before any of this is even worked out with the FTC/FCC. Nothing is going to change anytime soon. by badmotherfarker
The Dish/DirecTV merger took over a year to kill. by atlwxman
The Dish/DirecTV merger took over a year to kill.
This from an article on January 18th. What's changed in a month? Both companies have cash to operate through the year.
That said, I could be very, very wrong. Looks like I was about the merger announcement.
http://abcnews.go.com/Business/story?id=2887179 by rudder
This is going to be absolutely huge.
Everything you know about these two companies will change, this is the first step in a complete restructuring from the ground up.
Shareholders will be sure to benefit.
One of the biggest days in Sirius' history, to be sure.
p.s. I love how BenDee and I have both been at SBS the same amount of time yet he has approx 5700 more posts than I.
Promise I'm just as dedicated
This from an article on January 18th. What's changed in a month? Both companies have cash to operate through the year.
That said, I could be very, very wrong. Looks like I was about the merger announcement.
--Droo, @Network by droobie
Look for new subscriber growth to crater as those on the sidelines will wait until this is settled to sign up. by atlwxman
personally im excited about the thought of this. The potential here is huge. by soxnationonline
--Droo, @Network by droobie
--Droo, @Network
"If you've enjoyed SISO and Casual Fan over the years, you'll love the two of them together under one login," said a spokesman. "We're going to provide the best content, the funniest jokes, keenest observations, and most helpful suggestions, all at no additional cost to SBS members."
Stocks of SISO and Casual Fan were up on the news of the merger. Both SISO and Casual Fan denied rumors of a possible hostile takeover of semipenguin. by Casual Fan
I assume Sirius/XM will have to make a similar deal, they will have to buy new equipment for the customers whose equipment becomes obsolete. by araxen
"If you've enjoyed SISO and Casual Fan over the years, you'll love the two of them together under one login," said a spokesman. "We're going to provide the best content, the funniest jokes, keenest observations, and most helpful suggestions, all at no additional cost to SBS members."
Stocks of SISO and Casual Fan were up on the news of the merger. Both SISO and Casual Fan denied rumors of a possible hostile takeover of semipenguin.
Good to see a little humor today, its been pretty tense around here lately! by bandwagon03
I assume Sirius/XM will have to make a similar deal, they will have to buy new equipment for the customers whose equipment becomes obsolete.
In order to merge, either XM or Sirius would most certainly have to give up their slot in order to allow a competitor into the market. If this happens then one of the customer bases will need new radios. I'm guessing it will be sirius because they have fewer subscribers.
The NY Times article says it will take up to 15 months to sort out, so there's no immediate worries.. It will be interesting to see what transpires.
Personally, I don't oppose the merger, but even if the FCC approves it, I still don't think the merger will get by the Federal Trade Commission. Their job is to prevent things like this. by jwt873
XM and Sirius think they can close the deal by the end of the year? Good friggin luck. by angrytrousers
I'm willing to stick in a good 15-18$ for the best of what both had to offer. Please Sirius trash 36 the Beat at once and begin simulcasting BPM at once!!! because you currently have the SQ edge!
Anyhow, let's hope they mean good in wanting to complete with terrestrial, wifi and podcasting (which I kind of doubt).
Let's hope they mean well and have the drive and focus to pursue this goal. by pluche
--Droo, @Network by droobie
With no competition, whose to say they won't start jacking rates up or introducing a teir system of channel packages that will, of course, all cost extra?
I've tried. I've really tried. But I can't see anything good coming out of this. I really can't. by HoorayForSpike
---
Bubba was told to not talk about the merger on the air by Tim Sabean, Programming Director of Howard100/101. Was called on the warm line.
--Droo, @Network by droobie
"If you've enjoyed SISO and Casual Fan over the years, you'll love the two of them together under one login," said a spokesman. "We're going to provide the best content, the funniest jokes, keenest observations, and most helpful suggestions, all at no additional cost to SBS members."
Stocks of SISO and Casual Fan were up on the news of the merger. Both SISO and Casual Fan denied rumors of a possible hostile takeover of semipenguin.
I would hope not. I would hope that the two services would join forces in a way to make satellite radio the clear ONLY choice, but in corporate climes where the bottom line is king, there's a real risk that sub rates are going to go blastoff. by Tiburon
I would hope not. I would hope that the two services would join forces in a way to make satellite radio the clear ONLY choice, but in corporate climes where the bottom line is king, there's a real risk that sub rates are going to go blastoff.
They've pretty much said "We want to do it and are going to work toward it". Dish tried to acquire DirecTV and it took a YEAR before the governmental bodies said "Sorry, not going to happen."
--Droo, @Network by droobie
I agree...I worked for a major corporation that merged with another and it got ugly real quick. by bsummers12
maybe that is why it happened now... by takay
--Droo, @Network by droobie
Sirius/XM has plenty of competition. O r let me say they will
1. Odviously Terrestrial radio. Not really much competition since you can go down to radio shack and buy a radio for 10 bucks.
2. HD Radio: It's also free but after you buy an equally (ore more) expensive radio compared to XM or Sirius
3. (the key) Wi-Fi radio: It's very new technology that is relatively expensive. At this moment you can plug it in and listen to hundreds of thousands of Internet streams fro gree. This won't last long if I am reading the music industry correctly. they won't stand for it. Either they will make people pay subscribtions to them to listen, or force the Internet streams to charge.
Also I see this possible merger potentially spearheading compeition in other forms of entertainment, such as Cable TV. Cable is doing everything to keep from doing ala carte. If Sat radio is successful doing this then consumers will start loudly demanding ala cart for TV. Thus forcing Cable companies to provide programming that way or allowing for other companies to enter the business that will.
In addition I will admit that my decision on which company to subscribe with (XM or Sirius) was excruciatingly difficult. A merger would be much more convenient to me the consumer. I am willing to pay for that convenience. And why should the Government tell me I can't have it? This isn't a robber baron taking over the railroads in the late 1800's. Imagine automobiles and airplanes existing in there current form back then. That is what an XM/Sirius merger would be like. by BDBopper
(Not that that changes my opinion that the deal will not be approved). by HomieG
Doesn't that give him a pretty significant stake? I don't think they're options, but actual shares, so he may have a big vote in this deal. by angrytrousers
It may also explain the recent price drops of the Stiletto and the discontinuing of new aftermarket accessories. I had this strange feeling since the Stiletto chat, that there seemed to be a lack of enthusiasm for adding new features. This does not look good at all. by srm59
Doesn't that give him a pretty significant stake? I don't think they're options, but actual shares, so he may have a big vote in this deal.
I'm not sure what the whole thing encompasses. I'm not sure if XM and SIRIUS know themselves.
Help ME! by TSS Taylor
By Christopher Stern
Feb. 19 (Bloomberg) -- Sirius Satellite Radio Inc., the second-largest U.S. pay radio service, agreed to buy its larger rival XM Satellite Radio Holdings Inc. for $4.57 billion in stock, combining the only two competitors in the industry.
Mel Karmazin, chief executive officer of New York-based Sirius, will be CEO of the combined company, and Gary Parsons, chairman of Washington-based XM, will keep that position as well, the companies said today in a statement.
Sirius and XM faced pressure to merge from combined losses of almost $7 billion in the past eight years as both spent to attract subscribers with shows featuring Howard Stern and Oprah Winfrey. Neither company has reported a profit. The merger will face antitrust scrutiny and require the U.S. Federal Communications Commission to rewrites rules barring such a deal.
``From a government perspective, it's tricky,'' said Blair Levin, a media policy analyst with St. Louis-based Stifel Nicolaus & Co. Levin said it is more likely than not that the deal will go through.
Under the terms of the deal, which the companies describe as a merger of equals, XM investors will receive 4.6 shares of Sirius common stock for each share they own. Shareholders of each will own about 50 percent of the combined radio company.
The deal values XM at $17.02 a share, based on Feb. 16 closing prices, the last trading before markets closed for Presidents Day in the U.S. That represents a 22 percent premium over XM's close of $13.98. Sirius closed at $3.70. The companies have combined debt of $2.56 billion and cash of about $638 million as of September.
New Board
The new company's board will consist of 12 members, including Karmazin, 63, and Parsons, 56, four independent members named by each company, and one representative from each of General Motors Corp. and American Honda. Hugh Panero, CEO of XM, will continue in his role until deal closes, which both companies expect this year.
Sirius and XM will operate independently until the deal is completed, the companies said. The name of the combined company and the location of its headquarters will be decided later.
Sirius and XM anticipate rigorous antitrust review by the Justice Department and FCC. The companies said today they are competing for customers in broad media landscape that includes products such as Apple Inc.'s iPod, cell phones that play music and Internet music stations.
``What this is really about is war,'' Karmazin said today in an interview.
Karmazin first sparked talk of a merger in June, saying he would be interested in buying rival XM if the price were right.
``Clear synergies are likely there,'' Parsons said at a Citigroup Inc. investment conference on Jan. 9 in Las Vegas.
Subscribers
XM finished the year with 7.63 million subscribers, shy of the 7.7 million to 7.9 million it had forecast in November. The number of users rose 29 percent from 2005.
Sirius subscribers increased 82 percent to 6 million last year, in line with its forecast.
As of Feb. 16, Sirius had a market value of $5.2 billion, while XM was valued at $3.75 billion.
Sirius's euro denominated shares rose almost 8 percent today in Germany, while XM shares gained 4 percent.
``Does something like the iPod really compete with satellite radio?'' said analyst Levin. If federal regulators decide it doesn't, the deal is likely to be rejected, Levin said.
To contact the reporter on this story: Christopher Stern in Washington at
Last Updated: February 19, 2007 17:10 EST by Mikebny
Doesn't that give him a pretty significant stake? I don't think they're options, but actual shares, so he may have a big vote in this deal.
With no competition, whose to say they won't start jacking rates up or introducing a teir system of channel packages that will, of course, all cost extra?
I've tried. I've really tried. But I can't see anything good coming out of this. I really can't.
I'm taking a wait and see on this one. I've been becoming bored with the programming on SIRI lately, and hopefully this will change things. However, I've noticed that I'm listening to my Ipod more and more lately. I hope they do things that will change this.
RQS by robertq
QUESTION: Do you think the merger will go through?
YES: 65%
NOT SURE: 19%
NO: 16% by syphix924
Won't people delay satellite radio purchases until the platform issue is resolved? Alternatively, if they announce the "winning" platform tomorrow, then sales of the loser will tank completely.
So I expect them to say that they will continue to support both platforms, hoping that the FCC will let them keep both licenses. That hope seems like a very slender thread to base a merger on. The FCC decision is worth billions of dollars to the merged company. How can you do a merger, when the variables are that large? by pto
I'm not sure what the whole thing encompasses. I'm not sure if XM and SIRIUS know themselves.
Help ME!
Does this mean TSS will start selling XM radios now? by me_rubin
Reuters is now reporting it as a takeover. by loitus
I'm taking a wait and see on this one. I've been becoming bored with the programming on SIRI lately, and hopefully this will change things. However, I've noticed that I'm listening to my Ipod more and more lately. I hope they do things that will change this.
RQS
I have the S100 and find myself listening to the recorded/transfered songs more and more and not as much of the "live" sat music.
I also do not like the fact that most of the the music I like to listen to is censored.
I hope this merger will allow them to have more music channels that are not censored and no talk/DJ's as I just want to listen to music when I am on a music station... if I want to listen to people talk I will tune to a talk station. by AVspec
--Droo, @Network by droobie
I don't mind replacing all my equipment with a hybrid to get both channel lineups - as long as I continue to get my Lifetime Subscription.
The merger may be tough. I don't think they can continue to keep all the music channels on both services - does not make since to have duplicates - but with all the existing incompatible equipment on the market now - I don't see how they could say - "ok, were going to cut music channels in half for each service - and you'll have to purchase hybrid equipment to get what you were getting".
This should be interesting to watch over the next many months.
I have no interest in video in the car. by Tech44
I sure hope not. by TSS Taylor
This from an article on January 18th. What's changed in a month? Both companies have cash to operate through the year.
That said, I could be very, very wrong. Looks like I was about the merger announcement.
Marketwatch - February 19, 2007 6:43 PM ET
WASHINGTON (MarketWatch) -- A month ago, the chairman of the Federal Communications Commission said a tie-up between satellite radio companies XM and Sirius wouldn't get past his agency. On Monday, the chiefs of those companies decided to challenge that vow.
In a Presidents' Day announcement, with markets and government offices closed, Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. (XMSR) said they were taking their proposed marriage to stockholders and regulators to get an OK for a combination worth $13 billion and the ears of 14 million paid subscribers.
It's a bold move: on Jan. 17, FCC chief Kevin Martin said FCC rules would prohibit "one entity owning both of those (satellite) licenses." See archived story.
The Sirius-XM combination would follow directly on the heels of the hotly debated merger between AT&T (T) and BellSouth. Regulators wrangled for nine months over whether to approve that deal, suggesting a similar combination of two big firms will have to endure similar withering scrutiny.
Sirius Chief Executive Mel Karmazin who would also be chief of the combined, yet-to-be--named company and XM Chairman Gary Parsons are apparently aiming to convince the FCC that a merger is the best way to position the satellite radio outfit for battle with new technologies like podcasting.
Parsons and XM CEO Hugh Panero said the new 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 first granted our satellite radio licenses a decade ago."
If the companies past FCC and Justice Department muster, they're expecting the deal to be completed by the end of this year.
Opposition emerged quickly from the companies' broadcasting rivals. The National Association of Broadcasters slammed the proposal in a statement late Monday, saying it would be "shocked" if it went through.
"When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems," said NAB Executive Vice President Dennis Wharton, in a statement. "We're hopeful that this anti-consumer proposal will be rejected," Wharton said.
Meanwhile, at least one analyst appears to see hope for a deal.
Last week, Bear Stearns' Robert Peck told clients that both companies think a proposed merger could receive approval from regulators.
"We believe any public progress of making a deal has been slowed by the economics of the exact split in a (merged company)," Peck wrote in a research note.
To overcome this apparent hurdle, Peck said investors are likely to push the companies to "avoid quibbling over a few share points, to capture the much larger value of overall potential synergies."
Rgrds, Kevin by Siriuslyrocked
"If you've enjoyed SISO and Casual Fan over the years, you'll love the two of them together under one login," said a spokesman. "We're going to provide the best content, the funniest jokes, keenest observations, and most helpful suggestions, all at no additional cost to SBS members."
Stocks of SISO and Casual Fan were up on the news of the merger. Both SISO and Casual Fan denied rumors of a possible hostile takeover of semipenguin.
So will boards here merge with the XM ones if this happens
I don't know anything about business but I imagine they will have a ton of shit to figure out. That's if it even gets approved.
And that's another thing; how long will it take for the FCC to make a decision? Then what happens here in Canada? Those fuckin geezers at the CRTC take forever to decide on anything. I mean we just got satellite radio last year. by bc_1981
I don't know anything about business but I imagine they will have a ton of shit to figure out. That's if it even gets approved.
And that's another thing; how long will it take for the FCC to make a decision? Then what happens here in Canada? Those fuckin geezers at the CRTC take forever to decide on anything. I mean we just got satellite radio last year.
It may take longer since they'd have to petition the FCC to change the rule stating that the two SatRad licenses can't be combined through merger, etc.
--Droo, @Network by droobie
care to share what it is that excites you about this? i just don't know what xm has to offer that i'm not getting now other than music channels with commercials, oprah winfrey's telephone calls with her friend, and opie and anthony simulcast with fm radio, none of which i want. the only thing that does excite me about it is the possiblity of improved sound quality. but i really want no part of xm by planetahead
If the hurdle with the FCC is only that one company can't have both licenses, then it's easy for them to skirt that rule: release one of the licenses after the merger. With HM coming, that would likely be enough for both company's content. Create tiered content (as they said they would), and put specialized programming in the HM (MLB, NBA, NFL, Howard, O&A, etc.). by syphix924
I agree. I'm just wondering what the premium add on price is going to be to continue listening to Howard Stern. by malithion
If the hurdle with the FCC is only that one company can't have both licenses, then it's easy for them to skirt that rule: release one of the licenses after the merger. With HM coming, that would likely be enough for both company's content. Create tiered content (as they said they would), and put specialized programming in the HM (MLB, NBA, NFL, Howard, O&A, etc.).
I'm so thrilled at the thought of the merger you wouldn't believe. And by the way, I remember Charlie Ergen stating very clearly that if he'd have won the Dish/DirecTV takeover, that the platform would be his because of the Echostar manufacturing structure even though Dish was the underdog by several milions. by pluche
I really wonder how die-hard SIRIUS/XM fans will feel if 2 years down the road, after a failed merger, their satellite provider of choice closes its doors, because it probably WILL happen.
What's better: one joint company of XM & SIRIUS, or losing your company and ALL it's channels two years down the road? by syphix924
I wonder how this will be spun by the on-air talent of both of the companies. They've been at each other's throats for years... now what, a campfire and some s'mores?
Say hello to $14.95 a month or more subscription fees.
Hugh Panero is such a douche LOL... if there is any good news out of this it's that he got his clock cleaned. by Justice
Or the FCC may just say no. In which case, both companies are likely to be on very shaky ground financially. The proposed merger is a crapshoot. Great if you win, but sucks if you lose. A year is a long time to keep running separate companies when everyone expects one to go away.
Is this such an unlikely prospect:
1. The FCC says only one license is allowed.
2. "Sirius XM" announces that they will eventually consolidate on the XM infrastructure.
3. Everyone stops buying Sirius radios.
4. XM shareholders decide that now they are better off not merging, and vote against the merger.
It's going to be a very, very interesting year. by pto
The press release this morning about the merger agreement addressed 5 major reasons regarding the merger:
1. Greater Programming and Content Choices
2. Accelerated Technological Innovation
3. Benefits to OEM and Retail Partners
4. Enhanced Financial Performance
5. More Competitive Audio Entertainment Provider
Item numbers 3, 4, 5 are totally business related. Those reasons are for their benefit. Whether that is to stay in business or monopolize...who knows. I lean towards that this is for monopoly reasons, but shareholders don't care about how the consumer is affected unless it hurts revenues and the shareholder's dividend checks.
Items 1 & 2 directly relate to us (the consumer), but what if there are conflicts of interest in the programming. Will I really get greater programming and content because of this merger? Will I really get more stations to pick from? Will programming only be added and none be removed?
This could be a good thing, but I am not holding my breath. I really don’t want to end up paying $20/month for satellite. by spidey254
There are many things that need to be ironed out first before it even happens, and Mel isn't a stupid person. There will be things done to the company's advantage that won't be the best for us as subs but I don't think it will be a total dictatorship. They won't want to chase the customer base away. by Fergz99
They could've just bribed his ass to get the rule changed. by bc_1981
1) It will go up in value, or...
2) ...it will go down in value.
Hope this helps!
1) It will go up in value, or...
2) ...it will go down in value.
Hope this helps!
--Droo, @Network
My take: anyone cheering this merger is missing the big picture. This is a sign of how weak these companies are, not how rosy their prospects might be.
Also surprising: this is the lead story on the main news page (not just the business news page) at USATODAY.com. by pto
This is an expensive process. Filings, pleadings before the FCC and DOJ, lawsuits are all going to require expensive and time consuming lawyers.
If the merger does not go through, both companies will be severely weakened. I look for one or both to go bankrupt 6 months to a year after the failed merger.
I would say there is a less than 50/50 chance of this being approved. Mel looks great if it happens. If it doesn't happen, then Mel will be blamed for killing both companies. by atlwxman
XM. Is any one happy about this merger ? by ROLLTIDE
February 19, 2007
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
Forward Looking Statements
This letter contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., including potential synergies and cost savings and the timing thereof, future financial and operating results, the combined company's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of SIRIUS' and XM's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of SIRIUS and XM. Actual results may differ materially from the results anticipated in these forward-looking statements.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statement: general business and economic conditions; the performance of financial markets and interest rates; the ability to obtain governmental approvals of the transaction on a timely basis; the failure of SIRIUS and XM shareholders to approve the transaction; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of SIRIUS and XM may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; and operating costs and business disruption following the merger, including adverse effects on employee retention and on our business relationships with third parties, including manufacturers of radios, retailers, automakers and programming providers. Additional factors that could cause SIRIUS' and XM's results to differ materially from those described in the forward-looking statements can be found in SIRIUS' and XM's Annual Reports on Form 10-K for the year ended December 31, 2005, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 which are filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site http://www.sec.gov The information set forth herein speaks only as of the date hereof, and Sirius and XM disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release.
Important Additional Information Will be Filed with the SEC
This communication is being made in respect of the proposed business combination involving SIRIUS and XM. In connection with the proposed transaction, SIRIUS plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS and XM plan to file with the SEC other documents regarding the proposed transaction. The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of SIRIUS and XM. INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC by SIRIUS and XM through the web site maintained by the SEC at www.sec.gov. Free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to Sirius Satellite Radio Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention: Investor Relations or by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place, NE Washington, DC 20002, Attention: Investor Relations.
SIRIUS, XM and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding SIRIUS' directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2005, which was filed with the SEC on March 13, 2006, and its proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on April 21, 2006, and information regarding XM's directors and executive officers is available in XM's Annual Report on Form 10-K, for the year ended December 31, 2005, which was filed with the SEC on March 3, 2006 and its proxy statement for its 2006 annual meeting of shareholders, which was filed with the SEC on April 25, 2006. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available.
Please note: this is not a promotional e-mail. As a SIRIUS subscriber, you will periodically receive service notices via e-mail. These service notices are intended to provide you with helpful information that will facilitate and enhance your SIRIUS listening experience. by ErikW
but, the way I look at it. Sirius subscribers have a lot to lose with almost nothing to gain.
Sure, we'll get the option for MLB but that's about it. XM people should be happy ! They can get the good programming now (-:
Personally, I hope the merger doesn't go through.
Unless they get real creative with their a la carte pricing structure, I think we're all going to be paying more for less quality programming. by BecTech
I can see why they did it from a financial standpoint - it makes sense - but as a subscriber, I fail to see what the excitement is. I guess it will be nice to have MLB (although I'm ok with paying my $15 for the internet audio), but beyond that, what do I care about XM? It's just redundant. by Natron44
In order to merge, either XM or Sirius would most certainly have to give up their slot in order to allow a competitor into the market. If this happens then one of the customer bases will need new radios. I'm guessing it will be sirius because they have fewer subscribers.
The NY Times article says it will take up to 15 months to sort out, so there's no immediate worries.. It will be interesting to see what transpires.
Personally, I don't oppose the merger, but even if the FCC approves it, I still don't think the merger will get by the Federal Trade Commission. Their job is to prevent things like this.
1. better traffic (one city per channel) and integration with the Navigation system (real-time traffic)
2. AirAmerica (only way to get it here in Boston since clear channel switched the over-the-air station
Sirius has MUCH better music. The decades (80s, 90s) are deeper and more diverse - every time I tune-in to the XM 80s channel its either Whitney Houston or Michael Jackson. There's nothing like The Wave on XM. Then there's the quality ... XM, even built-in/integrated, doesn't sound as good to me as a plug-and-play Sirius radio via an aux-in port. If XM didn't give me the 1/2 off deal to stay for another year, I would have dropped it altogether - I'm finding that loading up 6 CDs worth of MP3s can last a very, very long time - and having an aux-in jack for my mp3 player works too!
Selfishly, if I can have Sirius programming & quality in a built-in, integrated player ... that's what I'll pay $12.95/month for. Let's face it- this business model looks like it's hit a ceiling - with free radios and 1/2 off for a year deals, there's still only 14M subscribers and >$3B /year in losses between the two... not sustainable.
Let the fireworks begin!
-mj by MJ-bos
C'mon!
You will have all the damn music you want to listen to and then some. Did I see some guy earlier ask for an Acoustic Blues channel? C'mon! Acoustic Blues?!??!
I want an Accordian only Cajun channel. What do you think about that?
Jeesh.
For me, Cornflakeguy, to consider this buyout of XM successful I only need one thing to happen. Keep about the same amount of channels, and spread them across XM and Sirus sats, DOUBLING OUR SOUND QUALITY.
If SQ doesn't approve after all is said and done then this was a failure and Mel can stick it up his azz.
And I do think that this forum sub section needs to be renamed "BUYOUT MANIA!" Hahahahahahaa!!!!11111oneone by cornflakeguy
I have both because I like the streams that are in the same genre but different enough to warrant a dual sub.
Do you think that a joint company will keep 2 old time radio streams? Do you think they'll keep 8 country streams? Or all the talk streams?
So, yes, I would rather one go out of business than have a single group with no choice. by dantodd
1. The FCC says only one license is allowed.
2. "Sirius XM" announces that they will eventually consolidate on the XM infrastructure.
(snip)
Go read up on Sirius' infrastructure sometime. It's an absolute work of art and engineering miracle that's technologically superior to XM's in every meaningful way. It cost a lot more to develop and deploy than XM's, but it's the reason why XM has to have repeaters everywhere, while Sirius can get away with having almost none. by miamicanes
If either XM or Sirius went out of business as a separate entity, who would come in to buy the second license?
Both companies have spent BILLIONS of dollars on this. It's not like someone's gonna come in and say "hey, we have a few billion...we can compete where the other company failed!"
Satellite radio is a niche business right now. This is not a broadcast over-air license we're talking about here. It's a license in a business where basically no one has proved it can make large amounts of money - yet.
If either XM or Sirius failed, without a merger, there would be one satellite radio provider - period. I'd almost take that to the bank, and it's likely the argument the companies will use to try to convince the FCC to change its policy. And...the FTC to sign off, as well...etc... by Inundated
1. The "merger of equals" line is bullshit. It always is. I'll use my company as an example: I started working for BellSouth Mobility (the wireless subsidiary of BellSouth) in 1996. A few years later, we had a "merger of equals" with SBC Wireless to form Cingular Wireless. Within a few months, the majority of the execs from the BellSouth side were gone, and we had adopted SBC policies. Three years ago, Cingular announced a "merger of equals" with AT&T Wireless (AWE). Pretty much everything about AWE is gone. This time last year, AT&T (formerly SBC) announced it was "merging" with BellSouth. The deal closed literally on the last business day of 2006 and we are now AT&T with AT&T policies and the AT&T corporate culture. Most of the former BellSouth execs have left. You can look at the Maytag/Whirlpool "merger" as another example. The simple fact that with the XM/Sirius deal the final stock will be Sirius tells you who is in the driver's seat on this one. "Merger of Equals" is typically used to make everyone feel better about the deal (in particular employees).
2. FCC Approval. I've seen a number of quotes from Michael Powell that essentially say the spectrum licenses for Sirius and XM prohibit them from merging. That is not quite true. The FCC tends to be quite precise when they release info, and Powell actually said the licenses prohibit one licensee from owning the other. If a "merger of equals" is performed, then neither owns the other, they simply merge and form a new company. Regardless of how the licenses are interpreted, however, the FCC can and frequently does alter its rules. They understand that the world is not static, and that changes are sometimes necessary to allow efficient use of the available spectrum. I've also seen that there are actually three spectrum licenses, but only two were assigned. I seem to recall that there are 2 licenses, but there were 3 companies bidding on them. I believe the third company was the company that offers sat radio elsewhere in the world (AfriStar, AsiaStar, EuroStar, etc), but they were not a winning bidder.
3. Monopolistic Practices. A number of people have mentioned that the Federal Trade Commission (FTC) or the Department of Justice (DOJ) would not permit the companies to merge as that would create a monopoly, and monopolies are illegal. This is far from the truth. In certain industries, a monopoly is the only market system that is viable. This would include any industry that has high barriers to entry; the very high cost of launching a satellite service, the cost of developing the transmission and reception systems, terrestrial repeaters, equipment distribution, programming and licensing could certainly be considered high barriers to entry. Think of your power company and you have a great example of where a monoply is the only viable market system in some industries. (Several years ago Georgia deregulated the natural gas industry, and it resulted in much higher bills for customers and a significant increase in complaints about natural gas service).
4. How fast will things change? As I have seen 3 times now, this is how a "merger" works. The companies hire an outside consulting firm to set up a "clean room" where corporate information from both companies is consolidated. Neither company has access to this room or the people in it. The consultants work to determine how things will actually be merged, and provide the necessary data to the various entities which must provide approval for the transaction. From the time a deal is announced until it is actually completed, the company's operate business as usual. They are still competitors. They continue to release new products as if there were no deal pending. If the deal is approved, the room is opened to the new company. If the deal is rejected and the merger offer withdrawn, the data in the room is destroyed.
5. Equipment. While I certainly have no idea how XM/Sirius will handle this, it might go something like this (based upon how the Cingular/AT&T Wireless transaction was done). Once a final service setup is determined, the company will move forward on building that service, with limited, if any, upgrades to the "legacy" system. All new sales will occur on the primary system, and customers on the old system can move to the new system if they buy new equipment. When it comes time to shut down the legacy system, the company will either replace the equipment for customers remaining on that system, or terminate their service. From the time of the merger to the point where the legacy system is shut down, the company will do everything it can to entice customers to migrate on their own and pay for it themselves. As the time draws near to shut down the legacy system, the "deals" get better and better. It is entirely possible that the regulators will require the legacy system to remain online for a certain period of time, and they could even dictate how customers on that system are migrated.
This was just my $0.02 based upon my experiences with mergers and stuff. I don't work for XM or Sirius, so don't take this as gospel.
Thanks!
Christopher in Atlanta
Sirius subscriber since 01-24-04. by ptkdude
One other point I noticed about the "merger of equals", and another sign Sirius is in the driver's seat here: Mel Karmazin will be CEO, and Hugh Panero will be gone. You can't get any more basic than that. by Inundated