Satellite radio juggernaut SiriusXM has bought internet radio giant Pandora for a whopping $3.5 billion.
According to Loudwire, the transaction, which took place on Sept. 24, will see two music-dependent radio giants join together and create the largest audio entertainment company in the world.
Pandora tested the waters of the merger by taking up a lot of their stock, which doubled in price in anticipation of the purchase.
“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,” Jim Meyer, CEO of SiriusXM said.
Executives involved in the merger will seek better rates for Pandora, who paid 55 percent of all revenue to labels and publishers in 2017, per Billboard.
The deal is expected to close in the first quarter of 2019, but still needs regulatory approval from the government. Because SiriusXM is not the dominant player in radio with or without Pandora, government regulators are unlikely to block the deal.
The combined efforts of SiriusXM and Pandora will likely give decent competition to other established music streaming services like Spotify, Apple Music and YouTube.
Power in the music industry will be spread out among multiple players, likely resulting in better outcomes for consumers. This diversification of the market allows for a free flow of competition, which always bodes well for consumer wants.
“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,” says Roger Lynch, CEO of Pandora.
