Deal will create the world’s
The home of Howard Stern, Trevor Noah, Billy Idol, Jenny McCarthy and the NFL will now become the new home for groundbreaking streaming music service Pandora.
All for $3.5 billion dollars.
SiriusXM currently has 36 million subscribers in North America. It was formed with the merger of the Sirius and XM satellite radio services in 2008.
According to a statement on the Sirius website, there are no immediate plans to change what SiriusXM or Pandora offers in the way of content. The plan is for the two platforms to continue to operate as separate services.
Sirius had paid Howard Stern hundreds of millions of dollars to lure him from traditional radio in 2006. SiriusXM has built a stable of stars with exclusive programming to go along with its lineup of music, news, talk and sports.
Pandora was founded in 2000 and has more than 70 million active users. It faces intense competition from Spotify and from music services offered by Apple, Amazon, and from Jay-Z’s Tidal, which is partly owned by Sprint.
“We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses,” SiriusXM CEO Jim Meyer said in a statement.
Pandora’s ability to stay an independent company was very much in doubt. SiriusXM had already invested $480 million to buy 19% of Pandora’s stock last year, and it was widely reported to be looking at a full purchase.
Soon after that investment was announced, Pandora co-founder Tim Westergren lost his positions as CEO and board member, and Michael Herring lost his job as president.
According to the Wall Street Journal, Pandora stock, which was down 35% for the year when they left, has nearly doubled since then, partly in anticipation of a purchase. The company still lost $221 million in the first half of the year, although that was down 43% from the first half of 2017.
SiriusXM stock was slightly lower in premarket trading following the announcement. Shares of Pandora jumped 9%, close to the price implied in the deal.