Sirius Buys XM Radio for $4.6 Billion
February 19th, 2007
Sirius has announced they will buy larger satellite radio rival, XM Radio in a stock deal worth $4.6 Billion. The purchase would put XM Radio’s total valuation 21% higher than its current stock price of $14.
The merging of the two satellite radio giants has really been inevitable since their conception. I remember watching CNN two years ago and they were already talking about how the exit strategy for both companies must include a buyout or merger if they want to survive. I also remember seeing an interview with one of the CEOs over a year ago, and rumors were already flying about a merger. Of course, the CEO shot them down, but it has just seemed unavoidable.
You don’t have to take my word for it, because here are some old posts that confirm the ramblings.
January 2005: Endgadget talks about a potential merger that would be shutdown by the FCC.
June 2006: Sirius CEO shuts down any ideas surrounding XM buying Sirius or any potential merger, saying he’ll be gone if it happens. He does say that a purchase of XM Radio would be okay though. He’s a man of his word. Story from Gizmodo.
February 2007: Today’s story. It looks like it’s going to happen, but who really knows the way these companies move and shake. The FCC could still get in the way of the deal.
It’ll be kind of interesting to see how this all plays out. I personally don’t think satellite radio is here to stay, so I’m interested to see what’s going to happen if the industry starts trending downward.