Announced on Monday, Sirius XM will take Pandora under its wing in an all-stock purchase for $3.5 billion. This makes Sirius XM the world’s largest audio-entertainment company.
“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,” states Sirius XM CEO Jim Meyer. “We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses. The addition of Pandora diversifies Sirius XM’s revenue streams with the U.S.’s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the car even further.”
The acquisition deal allows Pandora to look around for another buyer at a better rate. Current Pandora shareholders will receive 1.44 new Sirius XM shares for every share they own. Each share will be priced at $10.14. Since the announcement, Pandora’s shares have jumped 9 percent, sitting at a trade price just under $10. Sirius XM’s shares, however, have dropped 2 percent to $6.84 per share.