Satellite radio company SiriusXM will acquire music streaming service Pandora in a transaction valued at $3.5 billion. The proposed deal is expected to close in the first quarter of next year, subject to the approval of Pandora stockholders.
The merger offers Sirius a major music-streaming asset as tens of millions of listeners turn to streaming apps in an increasingly crowded market, with Pandora enjoying the largest audio streaming audience in the U.S, according to industry estimates. Spotify, Apple Music and Amazon Music Unlimited, have hitherto posed stiff competition.
The transaction would combine SiriusXM’s 36 million subscribers in North America with Pandora’s more than 70 million monthly active users. The two companies are expected to have combined revenue of about $7 billion this year. Pandora’s stock rose more than 3 percent in afternoon trading when the deal was announced.
Sirius XM’s chief executive Jim Meyer said of the two companies, “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.” He also said his goal is to create value through subscriptions, “No matter who comes into one of our trial tunnels, no matter where they come in, our goal ought to be that as they exit that trial, somewhere somehow, they are in a funnel which we’re monetizing.”
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