SiriusXM buying Pandora Media in $3.5 billion deal

Marco Green
September 24, 2018

The transaction has been unanimously approved by both the independent directors of PANDORA and by the board of directors of SIRIUSXM.

The companies say users shouldn't expect any immediate changes, Pandora will continue to operate as a separate service.

Terms of the deal will allow Pandora to pursue an alternative acquirer for a higher price, a standard practice in the mergers-and-acquisitions business that could result in the emergence of a different suitor. Over 70 million Pandora monthly active users make up the "largest digital audio audience in the US", although monetizing this subscriber base has proven tricky when a measly 6 million people or so are actually paying for the service.

Pandora has been trying to mark its position in an industry where competitors are routinely adding new features, giving away discounts and offering more content, including interviews with popular musicians.

The launch of Pandora in 2000 was revolutionary for introducing music fans to new artists, creating playlists based on a song or artist of an individual's choosing.

"The addition of Pandora diversifies Sirius XM'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 vehicle even further".

Lynch also said in the same statement: "We've made tremendous progress in our efforts to lead in digital audio".

"Together with SiriusXM, we're even better positioned to take advantage of the huge opportunities we see in audio entertainment, including growing our advertising business and expanding our subscription offerings". Six million users pay for Pandora's premium services, according to the company's most recent earnings report. Pandora's revenue for the third quarter is expected to be between $390 million and $405 million.

For every share of Pandora they own, shareholders will get 1.44 of newly issued shares of Sirius XM, the companies said in their announcement Monday.

The proposed deal is expected to close in the first quarter of next year, Pandora said, and must first win the approval of Pandora stockholders.

Sirius, which markets itself as Sirius XM, agreed to deliver stock now worth about $3.5 billion to fully acquire Pandora.

Other reports by Click Lancashire

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