SiriusXM to Acquire Pandora in $3.5 Billion Deal

Ivan Schwartz
September 25, 2018

United States satellite radio company SiriusXM is planning to acquire music streaming service Pandora in a $3.5 billion all-stock deal.

The transaction would combine SiriusXM's 36 million subscribers in North America with Pandora's more than 70 million monthly active users.

SiriusXM has been interested in Pandora for more than a year.

Monday's deal gives the pair a market value of about $34 billion, topping Spotify's $31.2 billion and follows through on Sirius' purchase of a 15 percent preferred-stock stake in Pandora for $480 million past year.

Pandora has faced intense pressure from competitors like Spotify and Apple.

In an all-stock deal, SiriusXM is now acquiring Pandora at a valuation of $3.5 billion. SiriusXM has previously invested $480 million on the music streaming service, so the two weren't strangers before this. And SiriusXM's relationships with automobile companies will open the door for Pandora to have better distribution in that market.

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Jim Meyer, Chief Executive Officer of SiriusXM, said: "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".

Pandora shares rose 9.5 percent to $9.95 in early US trading.

The companies said the transaction is expected to be completed in the first quarter of next year.

"The combination creates the world's largest audio entertainment company, with more than $7 billion in expected pro-forma revenue in 2018", Pandora said in a statement on their blog.

The satellite radio company, which already owns about 15 percent of Pandora, said it would maintain both the Sirius XM and Pandora brands and services. Shares of Pandora jumped 9%, close to the price implied in the deal.

The merger agreement provides for a "go-shop" provision under which PANDORA and its Board of Directors may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement.

Other reports by GizPress

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