Sirius And XM Complete Merger
The merger between Sirius and XM is no longer “proposed”. It is reality. As anticipated, Sirius and XM consummated their deal prior to the market opening today, and the company has a new name… Sirius XM Radio Inc.
Among the announcements this morning were:
- Combined Company Has Over 18.5 Million Subscribers, Annualized Second Quarter Revenue Exceeding $2.4 Billion
- Company to Offer Consumers Best of Both Services, While Maximizing Significant Efficiencies
- SIRIUS XM Reiterates Financial Guidance; Expects 2009 Synergies of $400 million and 2009 Adjusted EBITDA of over $300 Million
Full press release after the jump…
SIRIUS Satellite Radio (Nasdaq: SIRI – News) and XM Satellite Radio today announced that they have completed their merger, resulting in the nation’s premier radio company. The new company plans to change its corporate name to SIRIUS XM Radio Inc. The combined company’s stock will continue to be traded on the Nasdaq Global Select Market under the symbol “SIRI.”
SIRIUS XM Radio begins day one with over 18.5 million subscribers, making it the second-largest radio company, based upon revenue, in the country; and, based upon subscribers, the second largest subscription media business in the U.S. With under 10% penetration of the home and car market, the opportunity for continued growth is significant.
“I am delighted to announce the completion of this exciting merger between SIRIUS and XM,” said Mel Karmazin, CEO of SIRIUS XM Radio. “We have worked diligently to close this transaction and we look forward to integrating our best-in-class management teams and operations so we can begin delivering on our promise of more choices and lower prices for subscribers.”
“Every one of our constituencies is a winner. Combined, SIRIUS XM Radio will deliver superior value to our shareholders. By offering more compelling packages and the best content in audio entertainment, we are well positioned for increased subscriber growth. Our laser focus on subscribers will continue and listeners can be assured that there will be no disruption in service. We also believe that the completion of the merger will eliminate any confusion that has been lingering in the marketplace,” added Karmazin.
XM shareholders will receive 4.6 shares of SIRIUS common stock for each share of XM.
Competitive New Options for Consumers
SIRIUS XM Radio broadcasts more than 300 channels of programming, including exclusive radio offerings from Howard Stern, Oprah, Opie & Anthony and Martha Stewart, among others. SIRIUS XM Radio will offer these expanded options to consumers through arrangements with the world’s leading automakers and its relationships with nationwide retailers.
As a result of the merger, SIRIUS XM Radio will also be able to offer consumers new packages in audio entertainment, including the first-ever a la carte programming option in subscription media. In addition to two a la carte options, the new packages will include: “Best of Both,” giving subscribers the option to access certain programming from the other network; discounted Family Friendly packages; and tailored packages including “Mostly Music” and “News, Talk and Sports.” The first of the new packages will be available in the early Fall.
“One of the most exciting benefits of this transaction is the ability to offer subscribers the option of expanding their subscriptions to include the Best of Both services. Given the respective popularity of exclusive programming on both SIRIUS and XM, we expect many subscribers will upgrade their current subscription,” said Karmazin.
“The upside potential for both consumers and shareholders is huge. Consumers have the ease of adding premier programming without purchasing a new device. For shareholders, this kind of organic growth is a key part of the company’s future and the success we expect to see,” said Karmazin.
As promised when the merger was first announced, existing radios will continue to work and every subscriber has the option of maintaining their current service package.
Benefits for Shareholders Begin Immediately, Integration Already Under Way
SIRIUS XM Radio expects to begin realizing the synergies expected from this transaction immediately.
“In addition to realizing significant potential revenue growth, the management team will move quickly to capitalize on the synergies that many analysts have predicted for this combination. We expect to begin achieving those synergies without sacrificing any of the world-class programming and marketing we are known for,” said Karmazin.
The company today also reiterated guidance for the combined SIRIUS XM Radio. Based upon a preliminary analysis, the combined company expects to realize total synergies, net of the costs to achieve such synergies, of approximately $400 million in 2009; to post adjusted EBITDA exceeding $300 million in 2009; and to achieve positive free cash flow, before satellite capital expenditures, for the full year 2009. The company also expects that both synergies and adjusted EBITDA will continue growing beyond 2009.
“We have all the tools necessary to begin executing as a combined company with high aspirations for subscriber growth and greater financial performance in part from the significant synergies that we begin realizing literally today — on Day One. We are moving quickly to integrate the operations,” said Karmazin.
The corporate headquarters will be located in New York, NY and XM Satellite Radio, the company’s wholly-owned subsidiary, will remain headquartered in Washington, DC.
Effective after the close of the market yesterday, trading in XMSR common stock on the Nasdaq Global Select Market ceased.
YAY!! My XM is close to being worth $4.60
That’s great. Sure looks like siri is going for 1.50 in pre-market.
Is Mel even LOOKING at the stock price this morning?
My XM shares still show in my account. Anyone know why or anyone have this issue?
So THAT’S what it feels like to get screwed by the big boys.
Sirius and XM get mauled at the altar…in the bloodiest media-merger of all time.
I better go back to those lotto tickets…
This should teach the little man to not invest with the big boys….
zach401
Consider that the new company has 300 channels of sat radio—-
Question for you—-are the big boys buying or selling?
Not talking about Cramer.
Tyler what is your take on cramers opinion of siri? I saw that he does not like the siri common stock anymore.
Cramer is a trader. I usually watch him on a regular basis for some of his advice, but how can he flip flop so much on this company. I am sure there was some idea over the last 6 months or so that they were going to have to raise capital. Before he would say he needs two different services to listen to baseball and football and now he is saying he doesnt need both bc he can watch his games online. What a joke. I wonder who is paying him off. He may be right that the bonds are better to own, but that is still no reason to hate the company all of a sudden
They have avoided bankruptcy. The merger just took too damn long!!! The fast money boys say a trade gone bad is an investment. It looks like I’ll be “invested” for quite awhile!!! I still love the product but I am hating the stock right now just like everyone else who feels betrayed.
I hold xmsr, any idea when I’ll get siri stock. Seems that if I wanted out right now I couldnt get out?
I read somewhere that someone called their broker and they said that XM shares would convert on Friday.
I would think it would happen quicker ?
Well all the big boys made a mint from this including Jim Cramer and they all did it by sacrificing the everyday stock holder.
They never worry about hurting the everyday trader as long as they can add to their millions.
Well Mel and Cramer I hope you get that new mansion you both want.What the hell are a few million stupid everyday traders that supported you when you needed them. Now that you both got what you wanted which is more money and you don’t need their support anymore you can toss them aside because their usefulness is no longer needed.
Mel –never coming out and telling us anything during the negotations was a chickenshit thing to do. And Cramer–You are just a disgrace and I hope someday you get your just rewards for what you did to us. I sincerely hope CNBC gets smart and dumps you for what you have done to us.
Mel–I still think you are a very smart man who did what was needed to close but CRAMER–You are just a disgrace and I would never listen to you again because you have shown yourself to be a liar and a manipulator for your own profit in my opinion.
agree with Patrick…Short pricks,etc..what have we become…does this loser stock hit $3 in a year or two years…can’t sell now as I am one of the victims
Tyler,
As always, thank your for being the only credible source for complete and honest news on this merger. Your efforts on keeping everyone informed, along with Brandon and Charles, have been tireless. So thank you again and keep up the good work.
Now as far as the merger, stock price tumbling (no pop), and Mel making millions, I wouldn’t want anyone else but Mel orchestrating this deal, period. If your a short time trader, 2 years or less, you should be playing the “channel” to make money / additional shares as you wait for this company to be born. What makes me sick is that everyone has painted this merger into the corner, calling it a “Marriage” of equals. This is clearly not a marriage, but more like a very rough, dare I say “Bloody”, Birth of a 400 lb. Gorrilla in the media business. Well our little “Gorrilla” has been born, and their have been casualties along the way. In the short term, all those common share stockholder looking for a quick “Pop” and a way out. For me, an investor since 2002-03, I applaud the move to secure XM’s debt, buy the XM at a discounted price, and move forward with their business operating plan, which will make me a ton of money in 6, 12, or 18 months down the road.
As far as Cramer is concerned, I saw him give accolaids to Mel for his brilliance, an then abandon him, Say the merger was great and the FCC sucks, and now a 2.00 lottery ticket and Sirius XM Radio stock are the same thing. He’s an very good entertainer of whom I’ve grown tired of, yawn! Gee I can’t wait until tommorrow so I can see him tell me how to invest my money. He’s a sensationalist, making ratings, not money.
I own the stock also but plan to sell this week. Just wait for the rating agency’s downgrades. If they are going to reverse split, do it now while the blood flows.
also, tired of hearing crybabies blame everybody else for their mistakes. Get a pair, admit we have been wrong, learn something, and move on. Crying about “everyone else screwing you” suggests you have no thought process and need others to do it for you.