Sirius XM have bought audio streaming platform Pandora for over $3 Billion in stock in a move that could see them become the biggest company in the world of music.
Following their purchase of a 19% stake in Pandora for $480 Million, Sirius XM have took the leap to go all in. With Sirius XM’s primary audience being drivers, Pandora’s audience will give them access to people listening to music via their laptops, smart phones etc.
Another benefit of the deal for both companies is giving them a united voice when it comes to negotiating with labels and publishers over content deals. The combined user subscription and overall company value will now also sit above that of Spotify and Apple Music in the US.
Pandora will have the option of a ‘go-shop’ provision, meaning for a period of time they are allowed to entertain other offers, the provision will end at some point in 2019.
Pandora CEO Roger Lynch 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. 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.”