SiriusXM is buying Pandora for $3.5 billion

Pandora acquired by SiriusXM in $3.5bn deal

Pandora acquired by SiriusXM in $3.5bn deal

Satellite radio company SiriusXM will acquire music streamer Pandora in a transaction valued at $3.5 billion, Pandora said in a press release Monday, in a deal that would create an audio entertainment behemoth.

With this acquisition, SiriusXM gets access to Pandora's 70 million monthly users, including 5.6 million who are paying members of its Premium service. We can expect Pandora to try to upsell some of its own users on signing up for SiriusXM subscriptions, and Sirius may also draw on Pandora's software expertise to help it improve its own services. Just use the form below to register.

The deal is expected to close Q1 of 2019.

Streaming services have completely changed the way people consume music.

In fact, buying up Pandora would significantly expand SiriusXM's audience.

Monday's deal gives the pair a market value of about $34 billion, topping Spotify's $31.2 billion and follows through on Sirius' purchase of a 15 percent preferred-stock stake in Pandora for $480 million a year ago. SiriusXM says that cross-promotion opportunities are a major driving factor behind this acquisition, and that it will leverage "SiriusXM's exclusive content and programming with Pandora's ad-supported and subscription tiers to create unique audio packages". The company recovered this year after showing it could attract new paying subscribers and fend off music-streaming competitors ranging from Spotify to Amazon.com Inc.

SiriusXM said both brands will continue to exist, along with their respective products and services.

"The addition of Pandora diversifies SiriusXM's revenue streams with the US'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 vehicle even further", SiriusXM CEO Jim Meyer said in a statement.

SiriusXM's stock fell 2.3 percent to $6.82.

For every share of Pandora they own, shareholders will get 1.44 of newly issued shares of Sirius XM, the companies said in their announcement Monday.

Shares in Pandora, which has posted losses for at least the past eight quarters, initially soared 18.4 percent to $10.75 in premarket trading, topping an offer value of $10.05 based on Sirius' Friday closing price.

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