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The Oakland, California-based digital radio company, Pandora, is being acquired by satellite radio giant SiriusXM, the two companies announced on Monday. The transaction is expected to close in early 2019.
Andrew Harrer / Bloomberg / Getty Images
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Andrew Harrer / Bloomberg / Getty Images
The Oakland, California-based digital radio company, Pandora, is being acquired by satellite radio giant SiriusXM, the two companies announced on Monday. The transaction is expected to close in early 2019.
Andrew Harrer / Bloomberg / Getty Images
The satellite radio giant SiriusXM buys the California-based digital radio company Oakland in a $ 3.5 billion stock deal, the two companies announced on Monday. The transaction is expected to close in early 2019.
The merger would create "the world's largest audio entertainment company," said SiriusXM's CEO, James Meyer, during a conference call. The agreement should still be reviewed by antitrust regulators and shareholders, he added.
And that happens 15 months after SiriusXM has invested $ 480 million in Pandora. This decision allowed SiriusXM to appoint three members of Pandora's board of directors, including a chairman. Just weeks after the announcement of this deal, Pandora co-founder and CEO Tim Westergren left the company.
"It's the most poorly kept secret of a court that has been going on for several years," Meyer said Monday morning. "I had conversations with Pandora before Roger [Lynch, CEO] was there and certainly after Roger was there. We had a conversation 15 months ago and we were able to reach an agreement on the value, honestly … when we took this position, I assure you, there was no guarantee that a new transaction would be completed or we would end where we ended today. What has changed is my confidence in Pandora as an asset, and this confidence is the result of progress made over the last 12 months. "
SiriusXM is Howard Stern's broadcast house and host of a new show, which begins Monday afternoon with CNN presenter Chris Cuomo.
Spotify's on-demand streaming service is mostly in the news, but in the 18 years since its creation, Pandora has remained competitive in the field of music broadcasting. Spotify has 55.8 million active users per month in North America, compared with 70 million at Pandora and 36 million at SiriusXM. However, Pandora does not have the worldwide reach of Spotify. The Swedish streaming company has a total of 180 million active users per month, of which 79 million as subscribers.
Pandora has invested a lot of time and money in the development of its advertising activities and in the creation of regional offices for local businesses and auditors. This contrasts with Spotify (and SiriusXM), whose revenues come mainly from subscribers, as opposed to ads.
Although "the auditors' offers do not change immediately," the two companies said that the business combination could result in interesting exchanges between products to "create unique audio packages."
Liberty Media is the parent company of SiriusXM and owns the Atlanta Braves, Formula 1 races and a 34% stake in the Live Nation concert giant – Michael Rapino, CEO of Live Nation, is also a board member of SiriusXM. Liberty also owns a 6% interest in the Indian music streaming service Saavn.
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