What just happened? SiriusXM is scooping up Pandora for a cool $3.5 billion deal making it the world's largest provider of audio streaming services. When coupled with Pandora's 70 million monthly active users, however, the company feels it can win even when listeners don't subscribe.
Acquiring Pandora (p) could help SiriusXM (siri) attract more digital users. Sirius XM acquired a stake in Pandora past year for US$480 million, giving the online-radio company a lifeline after upstarts such as Spotify Technology SA began luring away streaming-music subscribers.
Broadcast radio, which has been feeling the same pressure from streaming, will now also have to fend off the combined strength of SiriusXM and Pandora. The new deal will see Pandora join SiriusXM for $3.5 billion in an all-stock transaction.More news: Trump Administration Sanctions Chinese Military Branch for Purchasing Russian Military Equipment
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Supporting and strengthening Pandora's brand. The company also expects to take advantage of its existing automotive relationships to bolster Pandora's in-vehicle presence. This transaction concludes Pandora's months-long search for a buyer.
Looking ahead, SiriusXM said that it plans to continue to operate both services post-acquisition.
The all-stock deal is expected to close in early 2019. "Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms", Jim Meyer said.
"The powerful combination of SiriusXM's content, position in the auto, and premium subscription products, along with the biggest audio streaming service in the USA, will create the world's largest audio entertainment company". Pandora has a "go-shop" period in which it can solicit other offers from third parties. Sirius already has a 15 percent stake in Oakland, California-based Pandora, the companies said in a statement Monday.