By Lisa Kerner
Charlotte, N.C., Feb. 20 - XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. entered into a definitive agreement to combine in a tax-free, all-stock merger of equals valued at an estimated $13 billion, including net debt of about $1.6 billion.
XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM they own, according to a company news release.
Sirius chief executive officer Mel Karmazin will be the chief executive and XM chairman Gary Parsons will serve in the same capacity of the new company.
The companies will operate independently until the transaction is completed, which is expected to occur by the end of the year.
"This combination is the next logical step in the evolution of audio entertainment," Karmazin said in the release.
"The combined company will be positioned to capitalize on Sirius and XM's complementary distribution and licensing agreements to enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses."
Sirius is a New York-based satellite radio service.
XM is a satellite radio services company located in Washington, D.C.
| Acquirer: | Sirius Satellite Radio Inc.
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| Target: | XM Satellite Radio Holdings Inc.
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| Transaction value: | $13 billion
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| Payment per share: | 4.6 shares of Sirius common stock for each share of XM stock
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| Announcement date: | Feb. 20
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| Expected closing: | By Dec. 31, 2007
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| Stock price for acquirer: | Nasdaq: SIRI; $3.70 on Feb. 16
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| Stock price for target: | Nasdaq: XMSR; $13.98 on Feb. 16
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