Home Music SiriusXM Agrees To Buy Pandora In Multi-Billion Dollar Deal

SiriusXM Agrees To Buy Pandora In Multi-Billion Dollar Deal

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In yet another big corporate acquisition in the music streaming space, satellite radio provider SiriusXM has agreed to buy long-running radio-style streaming service Pandora. The significant acquisition deal is valued at roughly $3.5 billion. In 2017, SiriusXM purchased a sizeable portion of Pandora, investing $480 million, which now represents a roughly 15% stake in the company. Pending the completion of this deal, which includes a caveat that allows Pandora to shop around for a better deal with other companies, Sirius would now absorb the entire company via stock transfer.

As SiriusXM CEO Jim Meyer said in a statement,

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.

Sirius XM noted that the deal would cause “no immediate change in listener offerings.” This seems to indicate that the company will continue to run Pandora as an autonomous platform, but also leaves open the possibility of changing that approach in the future.

According to the Wall Street Journal, under this new deal, Pandora’s stockholders will exchange each existing share for 1.44 newly issued shares of SiriusXM stock, a rate that will translate favorably for Pandora shareholders based on the respective stocks’ closing prices on Friday.

As the Wall Street Journal notes,

Pandora has the largest audio music-streaming service in the U.S. with 74.7 million active listeners to its free, ad-supported personalized music stations. The company has struggled, though, as users and ad dollars have migrated to services that allow listeners to play individual songs on demand.

Sirius XM, which has a base of more than 36 million subscribers, said the deal would allow it to create audio packages that would pair its exclusive content and programming with Pandora’s ad-supported and subscription tiers.

The deal comes at a time when corporate consolidation is causing waves in the music streaming space. Spotify still dominates the streaming market, boasting more than 83 million paying subscribers and many more free, ad-supported users. However, earlier this month, Apple completed its acquisition of song recognition platform Shazam in a move that aims to bolster their relatively new though consistently growing streaming service, Apple Music.

[H/T Wall Street Journal]

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