Benefits of the Sirius XM Merger
The main benefit of the SIRIUS and XM merger is that consumers will be able to enjoy enhanced content, much broader options, and technological advancement like never before. With this particular merger, satellite radio will be complete. Although SIRIUS has already been growing and evolving, with the merger of XM, things will be even more incredible than ever. To help the company establish and grow, Gary Parsons will serve as President and Mel Karmazin as Chief Executive Officer.
The infinitive agreement between SIRIUS and XM will be created as a tax-free, stock merger with an estimated value of around $ 13 billion. Included in this money is approximately $ 1.6 billion in net debt. As part of this merger, XM shareholders will earn an established exchange ratio of 4.6 SIRIUS common shares for each of the XM shares they already own. This means that, as a combined company, the shareholders of both companies will own approximately 50%.
In total, the board of directors will consist of 12 directors including the two mentioned, along with four independent members who will elect SIRIUS and XM, and a representative from American Honda and GM. As you can imagine, managing the combined business will be a dream team. Each brings years of vital experience in the fields of consumer electronics, radio, media, technology, and OEM engineering to the table.
Although both SIRIUS and XM will continue to operate as independent companies, once all the details of the merger have been resolved, they will merge under a new name and a new headquarters. As a result of the merger, 14 million subscribers combined will take advantage of the services provided. That means that for future innovations, SIRIUS and XM are creating a solid platform to build on.
Giving consumers the ability to choose the channels they want, as well as the specific genre, is a huge benefit. This means that consumers have the opportunity to buy à la carte, something never known before. With channels offering ad-free music, news, entertainment, talk and sports, the merger is expected to only strengthen the business. So having the ability to listen to music 24 hours a day, 7 days a week, 365 days a year is amazing.
The result of the merger of SIRIUS and XM will allow the combined company to offer consumers lower rates while achieving a simple system that has multiple functions. For companies like this to remain competitive in a tight market, this is critical. So for retail partners, the merger is also good news. This means that retailers will now be able to offer much more content, which will also give them an edge over the competition. For example, companies like Radio Shack, Target, and Best Buy will now be able to offer consumers products at a low price, while offering them more to choose from.
Finally, with the merger of SIRIUS and XM, as a merged company shows, the field of satellite radio will enjoy seeing success as well as financial gains. By being able to lower prices but also improve what is offered to the customer, the only way forward is to go up from a financial perspective. As you can see, this particular merger is destined for great success.