Sirius XM buying Pandora for $3.5 billion

Mae Love
September 25, 2018

Sirius, which markets itself as Sirius XM, agreed to deliver stock now worth about $3.5 billion to fully acquire Pandora. SiriusXM and Pandora have competed for business.

"We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora's strategic progress and stronger execution", Jim Meyer, Chief Executive Officer of SiriusXM states.

Satellite radio company Sirius XM Holdings Inc SIRI.O will buy online music service Pandora Media Inc P.N in a $3.5 billion all-stock deal that will help it battle growing competition from streaming rivals Spotify and Apple Music.

It isn't exactly a secret that SiriusXM has lost a bit of its luster with the rise of low-priced music streaming services, but as the old saying goes, "if you can't beat 'em, join 'em". At the moment, SiriusXM can boast around 36 million satellite radio subscribers, but with 70 million monthly active users, Pandora has almost double that amount. But Pandora's music platform could enable SiriusXM to significantly expand its presence beyond vehicles.

This is significant not to just radio, but to streaming music as well.

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SiriusXM plans to utilize "SiriusXM's extensive automotive relationships to drive Pandora's in-car distribution".

Meanwhile, the deal will help SiriusXM tap into Pandora's mobile strength while giving it the chance to improve in areas such as making personalized listening recommendations. "We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses". "The addition of Pandora will provide diversified revenue streams that will create the world's largest digital audio ad offering ..."

"We've made tremendous progress in our efforts to lead in digital audio". As stated earlier, Pandora has not been doing so well, so it will be important that the company leverages its SiriusXM content and reach to make the brand stronger.

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

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