WASHINGTON, D.C. It was probably only a matter of time: The two competing satellite radio companies will merge. Sirius Satellite Radio has received U.S. government regulatory approval for a buyout of XM Satellite Radio. The Washington, D.C.-based XM and the New York City-headquartered Sirius will have a combined 16 million-plus subscribers.
The nearly $5 billion buyout arrangement still needs Federal Communications Commission (FCC) approval, but passing antitrust muster was considered to be the big obstacle. Stock in both XM and Sirius jumped higher in afternoon trading on Monday after the news was announced.
The U.S. Department of Justice's antitrust chief, Thomas Barnett, was quoted as saying the government found little evidence that merging the two companies would harm consumers by reducing competition. Instead, the government found that competition from the iPod and other portable electronic media is plenty stiff enough to keep prices down.
XM posted a notice on its Web site today that the merger will "lead to more choices and better pricing for our subscribers" and reassured them that they won't need to change hardware after the merger. The company also said it would "communicate directly to our subscribers" after the FCC renders its decision.
Sirius, with 130 channels, is the home of Howard Stern's and Martha Stewart's radio programs. It currently costs subscribers $12.95 per month. XM boasts 170 channels, including programs by Bob Dylan and Oprah Winfrey, also for $12.95 per month. No word on how much the merged radio setup will work or how much it will cost.
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