Sirius XM Holdings has acquired Pandora in an all-stock transaction valued at approximately $3.5 billion.
The combination brings together SiriusXM’s base of over 36 million subscribers across North America and 23 million+ annual trial listeners, and Pandora’s 70 million monthly active users.
The transaction builds on SiriusXM’s position in subscription radio and as a curator of exclusive audio programming with the addition of one of the largest US audio streaming platforms, which will enable SiriusXM to expand its presence beyond vehicles into the home and other mobile areas.
Jim Meyer, Chief Executive Officer of SiriusXM, 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 US’s largest ad-supported audio offering.”
jim meyer, siriusxm
“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.”
Roger Lynch, Chief Executive Officer of Pandora, 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.”
roger lynch, pandora
“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.”
The transaction has been unanimously approved by both the independent directors of Pandora and by the board of directors of SiriusXM and is expected to close in the first quarter of 2019.
It is subject to approval by Pandora stockholders, expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and certain competition laws of foreign jurisdictions and other customary closing conditions.
Following the completion of the transaction, there will be no immediate change in listener offerings.
Pursuant 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.
Based on the 30-day volume-weighted average price of $7.04 per share of SiriusXM common stock, the implied price of Pandora common stock is $10.14 per share, representing a premium of 13.8% over a 30-day volume-weighted average price.
SiriusXM currently owns convertible preferred stock in Pandora that represents a stake of approximately 15% on an as-converted basis.Music Business Worldwide