Satellite Radio Merger Approved

[Jeremy Ordan]

Well at least another step closer... still need that FCC thing, but the Justice Department is a huge step forward


As an XM subscriber for me personally and a Sirius subscriber for my fiance, this is awesome news. I have XM because of baseball talk radio on XM175 but the music on Sirius is awesome (24, Lithium, all 90's grunge)

From NYTimes:

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March 24, 2008
Sirius Buyout of Rival XM Approved
By THE ASSOCIATED PRESS
WASHINGTON (AP) — The Justice Department has approved the $5 billion buyout of XM Satellite Radio by a rival, Sirius Satellite Radio, saying the deal was unlikely to hurt competition or consumers.

The merger was approved without conditions despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry.

The combination still requires approval from the Federal Communications Commission, which prohibited a merger when it granted satellite radio operating licenses in 1997.

The Justice Department, in a lengthy statement explaining its decision, said the two companies compete not just with each other but also with other forms of radio and entertainment. Customers must buy equipment that is exclusive to either XM or Sirius, and subscribers rarely switch providers.

“People just don’t do that,” an Assistant Attorney General Thomas Barnett, said in a conference call with reporters.

The government also appeared to endorse the argument of the companies that they compete with other forms of audio entertainment, including “high-definition” radio, Internet-based radio stations and even devices like Apple Inc.’s iPod.

The buyout received shareholder approval in November. The companies said the merger will save hundreds of millions of dollars in operating costs — savings that will ultimately benefit their customers.

“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, to $13.90 after the government’s announcement while Sirius shares rose 28 cents, to $3.18.