Sirius XM to Acquire Pandora for US $3.5 Billion
What: Sirius XM has announced the acquisition of Pandora Media Inc for US $3.5 billion.
Why it matters: The merger will create the biggest audio entertainment company, capable of competing against streamers like Spotify and Apple Music.
Sirius XM Holdings Inc, an American company that offers radio services via satellite, has announced it will acquire music streaming platform Pandora Media Inc, in an attempt to compete against rivals such as Spotify and Apple Music.
Sirius XM, owned by John Malone's Liberty Media Corp, provides over 175 radio stations to car drivers mainly, but the rise of streaming services and mobile content has forced the company to rethink its strategy in order to survive.
Reportedly, Sirius XM will acquire Pandora in an all-stock deal worth US $3.5 billion. Pandora's CEO Roger Lynch says the massive merger will help it to grow its ad business and subscription offerings. "The combination creates the world's largest audio entertainment company, with more than US $7 billion in expected pro-forma revenue in 2018," said SiriusXM in a blog post announcing the buyout.
Pandora says it has 70 million monthly active users. SiriusXM has 36 million paying subscribers in the U.S. and Canada. This merger could create a company able to compete successfully against Spotify. SiriusXM had previously invested US $480 million for a 19 percent stake in the streaming service back in June 2017, leading to speculation that it might intend to buy the company outright.