Sirius XM Holdings Inc. and Pandora Media, Inc. are joining forces and expected to make a lot of money out of the deal. SiriusXM is acquiring the streaming video company for $3.5 billion in an all-stock transaction, the companies revealed jointly on Monday.
SiriusXM, the world’s largest radio company, has 36 million U.S. paid subscribers and over 23 million annual trial listeners. Pandora has approximately 6 million U.S. paid subscribers and 71.4 million monthly active listeners.
The merger between the subscription radio service and audio streaming platform will create the world’s largest audio entertainment company with over $7 billion in anticipated Pro-forma revenue in 2018.
“Pandora’s powerful music platform will enable SiriusXM to significantly expand its presence beyond vehicles into the home and other mobile areas,” the company said in a release.
Subscribers will not initially notice any changes once the transaction is finalized.
It’s expected the merger will generate growth through cross-promotion as well as “unique audio packages” featuring exclusive content and programming. In addition, SiriusXM’s connections to automotive companies will further drive Pandora’s presence in vehicles.
“We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses,” Jim Meyer, Chief Executive Officer of SiriusXM, said. “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.”
The partnership will involve additional investments in content and technology via ad-supported and subscription services both inside vehicles and out. The music giants will also use its new platform to promote new and established artists “to deliver the most compelling audio experience that connects artists to their fan bases, as well as new listeners.”
“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,” Roger Lynch, Chief Executive Officer of Pandora, said. “This transaction will deliver significant value to our stockholders and will allow them to participate in the upside, given SiriusXM’s strong brand, financial resources and track record delivering results.”