SiriusXM’ Acquisition of Pandora Creates the Largest Audio Entertainment Enterprise Globally

SiriusXM & Pandora to Continue with Their Products, Services, and Offerings.The Acquisition Values Pandora at $3.5 Billion

SiriusXM has officially announced that it will acquire Pandora for $3.5 billion in an all-stock transaction. Together, these companies have declared that they will see revenues in excess of $7 billion by the end of 2018 and long-term growth opportunities.

The acquisition automatically transforms SiriusXM as a leader in the subscription radio domain. SiriusXM is renowned for curating exclusive audio content and the subsequent programming. Pandora, the largest US audio streaming platform, adds more muscle to SiriusXM’s already burgeoning inventory.

SiriusXM predominantly operates in the sphere of the in-car radio. By acquiring Pandora, SiriusXM can now expand substantially into newer avenues of home radio, mobile radio etc. As for subscribers of both the aforementioned platforms, nothing changes!

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“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. We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses. The addition of Pandora diversifies SiriusXM’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. 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 the radio to our passionate and loyal listeners, and attract new listeners, across our two platforms,” Jim Meyer, Chief Executive Officer of SiriusXM, 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 the upside, given SiriusXM’s strong brand, financial resources and track record delivering results,” Roger Lynch, Chief Executive Officer of Pandora, said.

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A long-term strategy to drive the growth of the companies is mentioned below:

  • Combined, Pandora and SiriusXM have more than 1 billion subscribers with the latter claiming an additional 23 million-plus trial subscribers. Hence, cross-platform marketing campaigns are a key factor in their long-term growth strategy
  • Pandora is gearing up to benefit from SiriusXM’ large in-car subscriber base, a nascent territory for the company. On the other hand, SiriusXM will integrate its niche and stylized content into Pandora’s ad-supported platform to maintain a steady stream of revenue
  • SiriusXM will continue innovating the combined platform in order to accelerate platform monetization. Both the companies expect a good ROI through their ad-supported and subscription services
  • Both the companies will strive hard to maintain and further bolster Pandora’s brand value and image
  • SiriusXM intends to create a platform that dynamically connects artists and fans. This is universal for new and old listeners as well as established and emerging artists

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