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by Cousin Geoff:
Sirius will be allowed to buy out rival XM for $5 billion, after the US Justice Department approved today.
From freep.com:
The Justice Department, in a lengthy news release explaining its decision, said the two companies compete not just with each other but also with other forms of radio and entertainment.
“The likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term,” the Justice Department said. “Accordingly, the division has closed its investigation of the proposed merger.”
XM Satellite shares rose $1.97, or 16.5 percent, to $13.90 in afternoon trading after the government’s announcement while Sirius shares rose 28 cents, or almost 10 percent, to $3.18.
Cousin Justin has Sirius, and I have XM, and we’ve both been curious as to what would happen if this actually went through. My biggest concerns are that I would not longer get my favorite channels or programs like Tom Petty’s Buried Treasure or Bob Dylan’s Theme Time Radio Hour. I am also worried about my portable Inno radio not being compatible. On the plus side, it is possible that there will be more channels, maybe taking the best from both services. Now that Sirius will have the monopoly on Satellite radio, I’m hoping they still pay attention to XM customers. I am assuming that they will want to keep us, because of the competing market now with portable internet radio. I also wonder how soon this will actually happen. The next step is getting approval from the FCC.
I’m just now hearing about this, so I’m sure more info will come soon.
*here’s another good article with more details, also answered some of my questions:
Analysts at Stifel Nicolaus said the FCC could impose conditions, such as requiring the companies to adhere to promises Karmazin made to Congress last year.
Karmazin promised lawmakers that a combined company would offer packages of channels that customers could pick on an “a la carte” basis, and that customers would be able to block adult channels and get a refund for those channels.
In addition, Stifel Nicolaus said, the FCC also may require Sirius and XM to promise that all existing satellite radios will continue to work after the companies are combined.
If that is true, about being able to pick selected channels, that would be awesome. There’s some channels I can’t live without, and others that I never listen to. And at the same time, I know there’s some channels on Sirius, like NBA basketball and the underground garage one, that I would love to be able to add. It’s also reassuring to hear that the FCC will make the two companies make all existing radios compatible. After reading about this, I’m actually starting to get a little excited.
