XM and Sirius announce plans to merge

New York—Rivals XM Satellite Radio and Sirius Satellite Radio announced Sunday that they are entering into a merger to form a satellite radio giant. XM and Sirius said they would each own half of the combined company, which will offer listeners news, sports, talk and entertainers ranging from shock jock Howard Stern to Oprah Winfrey.

Under the agreement, XM Chairman Gary Parsons would remain chairman of the combined company while Sirius’ Mel Karmazin would assume the role of CEO. The two companies, which would have a combined 14 million subscribers, said they had not yet determined a new name for the company or where its headquarters would be (Sirius is based in New York while XM is based in Washington, D.C.).

The new company would have a market value of about $13.0 billion, including about $1.6 billion in net debt. The merger is expected to be completed by the end of the year. However, federal regulators have stated that a merger will be difficult because there is already a provision barring both satellite radio licenses from being owned by the same company.

—Matthew Schwartz