Market Overview

SiriusXM To Buy Remaining Pandora Shares For $3.5B

SiriusXM To Buy Remaining Pandora Shares For $3.5B

As long speculated, Sirius XM Holdings Inc (NASDAQ: SIRI) will round out its 15-percent stake in Pandora Media Inc (NYSE: P) by acquiring all remaining shares for $3.5 billion in stock.

What Happened 

By unanimous board approval, Pandora shareholders will receive 1.44 newly issued SiriusXM shares for each Pandora share. The merger of the music industry’s largest distribution platforms creates the biggest audio entertainment company in the business. The new company expects to yield $7 billion in pro forma revenue in 2018.

Why It’s Important

“The addition of Pandora diversifies SiriusXM'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 car even further,” SiriusXM CEO Jim Meyer said in a press release.

“Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists and the broader content communities.”

The pair will not completely integrate, though. Both SiriusXM and Pandora are slated to continue on as independent brands and services.

What’s Next

SiriusXM is throwing its scale, subscription expertise, exclusive content, in-car distribution and financial resources behind Pandora. And it's expanding its reach through Pandora’s mobile, digital and ad platforms. The companies mutually benefit from cross-promotion opportunities.

Listener offerings will not immediately change on either platform, according to the announcement. 

The terms of the agreement permit Pandora to solicit and negotiate alternative proposals prior to the deal’s close in the first quarter of 2019.

Related Links:

Sirius Downgraded By Buckingham, But Analyst Sees Additional Upside In The Satellite Radio Stock

How Pandora Premium Access Is Faring As Competition Intensifies

Photo courtesy of SiriusXM. 

Posted-In: Streaming music streaming radioM&A News Top Stories Best of Benzinga


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