The merger between Sirius Canada and XM Canada has received approval from the Canadian Radio-Television and Telecommunications Commission (CRTC). The merger carries several conditions, but in many ways mirrors the path taken by the FCC in their approval of the satellite radio merger stateside.
"This decision will lead to the creation of a stronger combined organization, better equipped to innovate and compete in the broader audio entertainment marketplace," said Mark Redmond, President & CEO of both SIRIUS Canada and the merged entity. "We are pleased that the CRTC recognized the clear benefits derived from this merger. This is an exciting time for SIRIUS|XM Canada, and we look forward to continuing to offer a world-class entertainment experience for our current and future subscribers."
The combination of operations in Canada should help ease the moves the overall satellite radio makes. While certain unique conditions apply in Canada as well as the United States, satellite radio can now create stronger branding, united hardware platforms, and better flow with car manufacturers.
"Today's decision is great news for our subscribers, shareholders, employees and partners, keeping us on track for completing this transaction by June," said John Bitove, Executive Chairman of CSR. "SIRIUS|XM Canada will now have more than 1.8 million subscribers in Canada, and this merger will create long-term shareholder value."
The approximate ownership interest in CSR following closing of the transaction will be as follows, the balance being widely held:
CSRI Inc., 30.0% voting interest
CBC/Radio-Canada 20.2% voting interest
Slaight Communications, 20.2% voting interest
Sirius XM Radio Inc. (NASDAQ:SIRI) 25.0% voting interest
The Merger remains subject to the satisfaction of certain closing conditions and is scheduled to close by June 2011.
Some key notables:
The Commission considers that pricing is a crucial area in which the merger must demonstrate clear advantages to Canadian consumers, and acknowledges the significant commitment made by the applicants with regard to the maintenance of their current pricing plans. As such, the Commission directs the applicants to implement the commitment as offered: current pricing must be maintained until 31 December 2011 and existing customers as of 31 December 2011 must be price protected until 31 August 2012.
The Commission considers that the ability to access programming from both services is a significant advantage of the merger. The applicants have proposed to offer the same “best of” package as currently offered by Sirius XM (which may or may not have Canadian channels included), and requested exemptions from their conditions of license permitting reduced Canadian content on this package. However, the Commission considers that the provision of Canadian programming is the cornerstone of the Canadian broadcasting system as well as of the framework under which the SSR undertakings were licensed in 2005. As such, the Commission directs the applicants to offer a “best of” package to its customers. However, to conform to conditions of license 1(c) and 1(d), this package must respect the current 1:9 ratio of Canadian to non-Canadian channels.
With regard to online services, the Commission accepts the commitment made by the applicants to offer customers of Sirius the ability to access the service of XM, and vice versa, but directs the applicants to offer this at no additional cost to the consumer. In addition, the Commission directs the applicants to extend this commitment on the same terms to service on mobile devices.
Position - Long Sirius XM Radio