Group authorizes $5 billion acquisition of XM
Sirius and XM shareholders voted overwhelmingly Tuesday to support a planned merger of the two satellite radio outfits.The Dept. of Justice and the FCC must still give their approval, which appears to be anything but a rubber stamp. Regulators may consider the combined entity a monopoly, especially if it is classified as a satellite radio entity and not merely as a radio broadcaster with multiple competitors. Well aware of the regulatory hurdles, the companies released comments by Reed Hundt, who chaired the FCC from 1993-97. “If XM and Sirius combined, it will be pro-competitive in all likelihood,” he said. “These two firms have proved when kept apart to be incapable of mounting the really serious competition against … terrestrial radio that I had always hoped for.” Hundt was interviewed by the companies and the unedited transcript of the interview was submitted to the FCC for review. Mel Karmazin, chairman and chief exec of Sirius, said the goal remains getting the merger done by year-end. Early counts showed that more than 96% of XM shareholders and 98% of Sirius shareholders voted for the deal. If the deal closes, XM stockholders will receive 4.6 Sirius shares for each XM share that they hold. The stock of both companies surged on the deal, with XM shares tacking on almost 10% to close at $15.06 and Sirius gaining more than 6% to reach $3.63.