Drivers' Corner - Layover CB Shop
The XM and Sirius Satellite Radio Merger
I know this isn't CB related, but it is truck driver related. Since a large number of drivers now have either an XM or Sirius radio in their vehicles, I figured it would fit right in.
Federal regulators finally gave their approval for the merger of these two companies on March 24. Here is the history and update of the proposed merger.
February 19, 2007 was the first we heard about a possible merger of the two satellite radio companies XM and Sirius. The deal was laid out that it would be a merger of equals. Mel Karmazin, the current CEO of Sirius would become the CEO of the combined company. Gary Parsons, the current Chairman of XM would become the Chairman of the combined company. The new company would share a single corporate name and headquarters in a location not yet determined. All they needed was approval by both companies' shareholders and government offices.
Sounds good, right? Yeah, sure! We were all wondering if our current equipment would still work and if the merger would be good for us. Both XM and Sirius assured us that everything would be fine. When the merger was complete, they said we would be able to enjoy the benefits of both companies.
On October 4, 2007 XM and Sirius announced that shareholders meetings would be held on November 13 to confirm the merger agreement. On October 30, Glass, Lewis & Co., the leading independent proxy advisory firm released its opinion to XM and Sirius shareholders to vote for the merger. After closing the special meeting by XM shareholders on November 13, a report was released that the merger was approved by 99.8 percent of the shareholders. Sirius announced at the conclusion of the special meeting that the merger was approved by 96 percent of the shareholders.
One year and ten days after the initial announcement, XM and Sirius announced that neither company would exercise their right to terminate the merger agreement. The merger was still pending approval by the Department of Justice or the Federal Communications Commission. Both Government agencies must approve the merger before it can take effect.
The biggest hurdle was crossed on March 24, 2008 when the merger was finally given the "blessing" of the Department of Justice's Antitrust Division:
"After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers....The Division's investigation indicated that the parties are not likely to compete with respect to many segments of the satellite radio business even in the absence of the merger. Because customers must acquire equipment that is specialized to the satellite radio service to which they subscribe, and which cannot receive the other provider's signal, there has never been significant competition for customers who have already subscribed to one or the other service."
Now we just need to wait for the FCC to make their ruling. How long will that be? That is anyone's guess since it took the DOJ more than a year to make a decision. This "merger of equals" doesn't look so equal anymore, since XM stock is at $13 a share and Sirius stock is at $3.
Will this whole thing be good for the consumer or not? I think so and I think most subscribers will as well. Personally, I am looking forward to having more channels to surf, but only if I can avoid Howard Stern and Oprah. Those two I can do without!