SiriusXM to Buy Pandora in $3.5 Billion All-Stock Deal

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The deal will create the world's largest audio entertainment company.

SiriusXM on Monday announced it will buy music streaming service Pandora Media in an all-stock deal valued at about $3.5 billion that will create the world's largest audio entertainment company.

The deal has been unanimously approved by both the independent directors of Pandora and the board of directors of SiriusXM, the two companies said in Monday’s announcement, which said the merged group would have more than $7 billion in expected revenue in 2018.

The all-stock transaction values Pandora at $10.14 a share, about 12 percent more than the company’s closing price Friday. SiriusXM already had a 15 percent stake in Pandora.

SiriusXM, which operates satellite radio and online radio services in North America, first bought into Pandora last year, investing $480 million in the Oakland, California-based firm, which has been hard hit by online streaming competitors such as Spotify and Amazon. Pandora in 2017 launched its own subscriber-based on-demand service and brought in former Sling TV CEO Roger Lynch to help turn the business around.

Pandora has more than 70 million monthly active users, representing the largest digital audio audience in the U.S., and had about 6 million subscribers at the end of the second quarter of this year. SiriusXM has a subscriber base of more than 36 million across North America, with some 23 million-plus annual trial listeners.

In their joint statement, the two companies said: “This strategic transaction builds on SiriusXM’s position as the leader in subscription radio and a critically acclaimed curator of exclusive audio programming with the addition of the largest U.S. audio streaming platform. Pandora’s powerful music platform will enable SiriusXM to significantly expand its presence beyond vehicles into the home and other mobile areas. Following the completion of the transaction, there will be no immediate change in listener offerings.”

Sirius XM and Pandora said the transaction is expected to be completed in the first quarter of next year. The companies were scheduled to hold a conference call Monday morning in New York to discuss further details of the deal.