SiriusXM has acquired Pandora in an all-stock transaction valued at $3.5 billion. The transaction has been unanimously approved by both the independent directors of Pandora and by the board of directors of SiriusXM. The transaction is expected to close in the first quarter of 2019.
Under the deal, the Pandora brand will remain current, including Pandora Plus and Pandora Premium. Pandora products and pricing will not change as a result of this announcement.
SiriusXM CEO Jim Meyer said, “We have long respected PANDORA and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by PANDORA’s strategic progress and stronger execution. We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses. The addition of PANDORA diversifies SIRIUSXM’s revenue streams with the U.S.’s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the car even further. Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists, and the broader content communities. Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms.”
Pandora CEO Roger Lynch said, “We’ve made tremendous progress in our efforts to lead in digital audio. Together with SIRIUSXM, we’re even better positioned to take advantage of the huge opportunities we see in audio entertainment, including growing our advertising business and expanding our subscription offerings. The powerful combination of SIRIUSXM’s content, position in the car, and premium subscription products, along with the biggest audio streaming service in the U.S., will create the world’s largest audio entertainment company. This transaction will deliver significant value to our stockholders and will allow them to participate in upside, given SIRIUSXM’s strong brand, financial resources and track record delivering results.”
According to the agreement, the owners of the outstanding shares in Pandora that SiriusXM does not currently own will receive a fixed exchange ratio of 1.44 newly issued SiriusXM shares for each share of Pandora they hold. The transaction is expected to be tax-free to Pandora stockholders. SiriusXM currently owns convertible preferred stock in Pandora, representing a stake of approximately 15 percent on an as-converted basis.
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