24/7 Wall St Comments On Sirius & XM Merger

December 05, 2006, 24/7 Wall St
How Sirius & XM Would Look As a Merged Company
This story was originally posted at 5:00PM EST earlier today. No data has been changed or altered.

While many are guessing or speculating on a merger between XM Satellite (XMSR) and Sirius (Satellite Radio (SIRI), very few have shown what a combined company would look like and what issues would need to be overcome. No one can say the deal is a shoe in, but it is more than worth investigating what a combined operation would look like.
The Department of Justice might block a deal FCC may not allow a merger of the two satellite radio companies, but, if one gets into significant financial difficulty, that might change. If they are both running very well and they are still going to grow, then they have to put on a salesman hat to win approval, but if both companies have growth issues and a potential survival issue and then all of a sudden neither can run profitably then they would have a better case of pressing the DOJ & FCC to approve a merger. There would be some conditions, but if the FCC had to see a near monopoly or had to see yet another failure of a space venture they just might be inclined to go along without blocking the deal from the start.
There are some regulatory issues that would be there as noted, and at least Mel Karmazin has already addressed that as a real issue. He of course also has expressed interest in acquiring XM. If this were to happen soon before a new administration that may or may not be more hawkish on blocking mergers, the issues could potentially be worked out. After all, there are others that have at least some capabilities of offering a competing service in the US and Canada. Satellite radio is also not going to be deemed as important as terrestrial radio to an FCC or to a DOJ...read more: here

12/06/2006 10:01:00 AM

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