Sirius and XM merge !

[DSM4Life]

http://investor.sirius.com/ReleaseDe...leaseID=230306

SIRIUS and XM to Combine in $13 Billion Merger of Equals
Provides Consumers with Enhanced Content, Greater Choices and Accelerated Technological Innovation
Enables Satellite Radio to Better Compete in Rapidly Evolving Audio Entertainment Industry
Extraordinary Value Creation for Shareholders
Mel Karmazin to Serve as Chief Executive Officer and Gary Parsons to Serve as Chairman of Combined Company
WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- XM Satellite Radio (Nasdaq: XMSR - News) and SIRIUS Satellite Radio (Nasdaq: SIRI - News) today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently Chief Executive Officer of SIRIUS, will become Chief Executive Officer of the combined company and Gary Parsons, currently Chairman of XM, will become Chairman of the combined company. The new company's board of directors will consist of 12 directors, including Messrs. Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the Chief Executive Officer of XM, will continue in his current role until the anticipated close of the merger.

The combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media, consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters location prior to closing.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts' consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:


* Greater Programming and Content Choices -- The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings.

* Accelerated Technological Innovation -- The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment.

* Benefits to OEM and Retail Partners -- The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively.

* Enhanced Financial Performance -- This transaction will enhance the
long-term financial success of satellite radio by allowing the combined
company to better manage its costs through sales and marketing and
subscriber acquisition efficiencies, satellite fleet synergies, combined
R&D and other benefits from economies of scale. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion.

* More Competitive Audio Entertainment Provider -- The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers' attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. In addition to existing competition
from free "over-the-air" AM and FM radio as well as iPods and mobile
phone streaming, satellite radio will face new challenges from the rapid
growth of HD Radio, Internet radio and next generation wireless
technologies.

"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first granted our satellite radio licenses a decade ago."

"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies. 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. Each of our companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our stakeholders."

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.

SIRIUS's financial advisor on the transaction is Morgan Stanley and Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal counsel. XM's financial advisor on the transaction is J.P. Morgan Securities Inc. and Skadden Arps, Slate, Meagher & Flom LLP; Jones Day; and Latham & Watkins LLP are acting as legal counsel.

Conference Call and Webcast Information

The companies will hold a joint conference call and webcast on Tuesday, February 20, 2007 at 8:30 AM ET to discuss this announcement. The conference call can be monitored by dialing 800-573-4840 within the U.S. and 617-224-4326 for all other locations, passcode 29490052. The webcast can be accessed at http://www.sirius.com and http://www.xmradio.com as well as on their satellite radio services by tuning to SIRIUS channel 122 and XM channel 200. The webcast will be archived at http://www.sirius.com and http://www.xmradio.com.

About SIRIUS

SIRIUS, "The Best Radio on Radio," delivers more than 130 channels of the best programming in all of radio. SIRIUS is the original and only home of 100% commercial free music channels in satellite radio, offering 69 music channels. SIRIUS also delivers 65 channels of sports, news, talk, entertainment, traffic, weather and data. SIRIUS is the Official Satellite Radio Partner of the NFL, NASCAR, NBA and NHL, and broadcasts live play-by-play games of the NFL, NBA and NHL, as well as live NASCAR races. All SIRIUS programming is available for a monthly subscription fee of only $12.95.

SIRIUS Internet Radio (SIR) is a CD-quality, Internet-only version of the SIRIUS radio service, without the use of a radio, for the monthly subscription fee of $12.95. SIR delivers more than 75 channels of talk, entertainment, sports, and 100% commercial free music.

SIRIUS products for the car, truck, home, RV and boat are available in more than 25,000 retail locations, including Best Buy, Circuit City, Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack and at http://shop.sirius.com.

SIRIUS radios are offered in vehicles from Audi, Bentley, BMW, Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep®, Land Rover, Lexus, Lincoln, Mercury, Maybach, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Rolls Royce, Scion, Toyota, Volkswagen, and Volvo. Hertz also offers SIRIUS in its rental cars at major locations around the country.

Click on http://www.sirius.com to listen to SIRIUS live, or to purchase a SIRIUS radio and subscription.

About XM

XM (Nasdaq: XMSR - News) is America's number one satellite radio company with more than 7.6 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, Chicago, the Country Music Hall of Fame in Nashville, Toronto and Montreal, XM's 2007 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music, premier sports, news, talk radio, comedy, children's and entertainment programming; and the most advanced traffic and weather information.

XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota is available in 140 different vehicle models for 2007. XM's industry-leading products are available at consumer electronics retailers nationwide. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the benefits of the business combination transaction involving Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., including potential synergies and cost savings and the timing thereof, future financial and operating results, the combined company's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," or words of similar meaning. Such forward- looking statements are based upon the current beliefs and expectations of SIRIUS' and XM's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of SIRIUS and XM. Actual results may differ materially from the results anticipated in these forward-looking statements.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statement: general business and economic conditions; the performance of financial markets and interest rates; the ability to obtain governmental approvals of the transaction on a timely basis; the failure of SIRIUS and XM shareholders to approve the transaction; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of SIRIUS and XM may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; and operating costs and business disruption following the merger, including adverse effects on employee retention and on our business relationships with third parties, including manufacturers of radios, retailers, automakers and programming providers. Additional factors that could cause SIRIUS' and XM's results to differ materially from those described in the forward-looking statements can be found in SIRIUS' and XM's Annual Reports on Form 10-K for the year ended December 31, 2005, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 which are filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and Sirius and XM disclaim any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this press release.

Important Additional Information Will be Filed with the SEC

This communication is being made in respect of the proposed business combination involving SIRIUS and XM. In connection with the proposed transaction, SIRIUS plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS and XM plan to file with the SEC other documents regarding the proposed transaction. The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of SIRIUS and XM. INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC by SIRIUS and XM through the web site maintained by the SEC at http://www.sec.gov. Free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with the SEC can also be obtained by directing a request to Sirius Satellite Radio Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention: Investor Relations or by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place, NE Washington, DC 20002, Attention: Investor Relations.

SIRIUS, XM and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding SIRIUS' directors and executive officers is available in its Annual Report on Form 10-K for the year ended December 31, 2005, which was filed with the SEC on March 13, 2006, and its proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on April 21, 2006, and information regarding XM's directors and executive officers is available in XM's Annual Report on Form 10-K, for the year ended December 31, 2005, which was filed with the SEC on March 3, 2006 and its proxy statement for its 2006 annual meeting of shareholders, which was filed with the SEC on April 25, 2006. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials to be filed with the SEC when they become available.

[STYLE74]

Great post bro, I have 3000 shares of Sirius stock and it hasn't been doing so good.

[PROTEINSHAKE]

i bailed on my sirius & xm stocks when they peaked.... sorry style...

[abstrack]

So does this mean that XM subscribers will get Sirius channels and vice-vesa?

[PROTEINSHAKE]

i heard a while back that the 2 networks & the electronics were not compatible...... ? any one know for sure

[Slowhand]

I've used both services and wasn't impressed with neither.

[DecimaMAS]

I've used both services and wasn't impressed with neither.

You can say that again. All of the stations are on a playlist, just as bad as the radio and even more predictable sometimes.

The worst part of it is that they still play radio-edited versions of the songs, despite PAYING for the service! You're basically paying to listen to the radio. Were it not for the MLB broadcasts, I'd throw it out of the window and never look back.

[abstrack]

i heard a while back that the 2 networks & the electronics were not compatible...... ? any one know for sure

With the new merger they should be expanding this. I am assuming?? Kind of like Sprint & Nextel. They both operate on the same networks now.

I was just hoping that I didnt have to go out and buy a new player that would work on both networks. They should have it so current subscribers can access both networks for a small upgrade fee.

[PROTEINSHAKE]

I agree abstrack....as long as the electronics is capable.

[cj1capp]

cool will howard stern be on booth networks.

[abstrack]

Even if the electronics were not capable. If they could broadcast the programs on both networks, then that would be optimal.

[Warrior]

Mel better figure out how to avoid the FCC concerns and finally make all of his shareholders some big money!

I can't wait to see what the market does today... apparently, the CEOs have a meeting concerning the details at 0830...

[STYLE74]

Mel better figure out how to avoid the FCC concerns and finally make all of his shareholders some big money!

I can't wait to see what the market does today... apparently, the CEOs have a meeting concerning the details at 0830...

Yes bro that's what we need.

[STYLE74]

Hey warrior you really think the fcc is going to be a problem? I don't think they can do anything as long as it's a pay service. If they try to regulate satelite then they would have to try and regulate everything that we pay for including books, cable tv, magazines, porn....everything. I just don't see that ever happening, that would totally messing with our rights.

[PROTEINSHAKE]

the FCC had major issues with the two at the start...its a monopoly law thing...

[Warrior]

Yeah - if you read their prospectus, they granted only two satelite radio licenses. If - when - they merge that would mean one company has both licenses. I am guessing that one would have to be available for another entity... or something.

Basically, they have to prove that the merge is in the best interest for the consumer... and that two seperate companies is only hindering industry potential...

Back in January they talked about; stock prices rose. Then the FCC said it couldn't happen - stock prices fell. Then, the FCC came back and said it could happen, they just needed to explain themselves... stock prices bumped up a bit again. Now, an actual deal has been made and the only hurdle is convincing the FCC that the merger is legit.

Pre-market, SIRI is up 16%!

$$$

[Warrior]

Here is a story from Businessweek that just hit the wire... it basically explains the background of this.

The XM-Sirius Deal May Not Fly

The combination needs approval from the FCC. But the commission's chairman is skeptical—and the regulatory body has rejected similar deals

by Phil Mintz

The long dance that led XM Satellite Radio and Sirius Satellite Radio to agree to what's being termed a $13 billion "merger of equals" announced Feb. 19 may have been the easy part. Now the two companies need the Federal Communications Commission to go along. And that might very well be even tougher than reaching an agreement on how to combine the two long-standing rivals.

The long-rumored deal, unveiled on President's Day, looks a lot like an acquisition of XM by Sirius, despite the "merger of equals" language. XM shareholders will receive 4.6 shares of Sirius stock for each share they own and will get a premium of roughly 22% above the Feb. 16 closing price. Mel Karmazin, Sirius' chief executive, will take the CEO post at the combined company, while Hugh Panero, XM's chief executive, will not have an executive role. Gary Parsons, XM's chairman, will continue in that position at the combined companies.

"This combination is the next logical step in the evolution of audio entertainment," said Karmazin, in the merger announcement. "Together, our best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders of both companies.

The two companies also said in their announcement Monday that the transaction is subject to "regulatory review and approvals, including antitrust agencies and the FCC." But it doesn't explain how the merger, which the companies said they hope to close by yearend, is going to pass regulatory muster.

Precedent for Rejection

On Jan. 17, FCC Chairman Kevin Martin told reporters that XM and Sirius' satellite radio licenses would preclude a merger. Shares of XM (XMSR) dropped 10%, and shares of Sirius (SIRI) dropped 7% that day. In a statement late Monday Martin said the companies would have to clear a high hurdle in making their case for the merger. "The companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices," Martin said.
Industry observers note that the FCC has the leeway to change the rules or permit an exception, particularly if it concludes that satellite radio is just part of a larger constellation of providers, including traditional broadcast radio and the Internet. However, if you're looking for a precedent, you need go back no further than 2002, when the FCC rejected a merger between satellite TV companies EchoStar Communications (DISH) and DirecTV Group (DTV) on the grounds that it would have created a monopoly in rural areas. As the XM-Sirius merger gained steam last week, several investment analysts said that FCC approval was possible but not assured (see BusinessWeek.com, 2/16/07, "Analyst to XM, Sirius: Quit Quibbling").

Industry Criticism

Industry competitors are certainly going to put pressure on to block the merger. Within hours of the merger announcement, the National Association of Broadcasters, which represents broadcast stations, labeled it "anti-consumer" and called on the FCC to block it. The broadcasters took a swipe at an argument that proponents of the merger would be expected to use, that the two services are not profitable and are being hurt by competition.

"When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems," the NAB said a statement. "Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bail-out to avoid competing in the marketplace."
The FCC issue is just one of the questions that are going to face Karmazin and Parsons. But it may be the one with strongest likelihood of stopping the merger in its tracks.

[Warrior]

Sirius, XM expect deal to close by end 2007
Tue Feb 20, 2007 8:43am ET

NEW YORK, Feb 20 (Reuters) - Sirius Satellite Radio Inc. (SIRI.O: Quote, Profile , Research) and XM Satellite Radio Holdings Inc. (XMSR.O: Quote, Profile , Research) expect their merger to close by the end of 2007, according to presentation slides for an analysts' conference call on Tuesday.

The two companies expect shareholders to vote on the deal in four to six months and expect to receive regulatory approval in about nine months, according to the slides.

Sirius plans to buy rival XM for $4.6 billion in stock, but U.S. Federal Communications Commission Chairman Kevin Martin said on Monday the deal would face a tough time winning regulatory approval.

[PROTEINSHAKE]

i think it may hit some serious snags along the way.....this whole thing is "proposed"......nothing is set in stone & its FAR from a done deal.

[Doc.Sust]

i would like to see this merger happen, it will be great for both networks

[SVTMuscle*]

double post owns you!



on CNBC they were saying it only has about a 70% chance of actually happening

[duramaxedge]

wouldnt that be called a Monopoly??

[Warrior]

wouldnt that be called a Monopoly??

It would be in a sense... but it's not throwing a required service to anyone. You don't have to buy it - there are plenty of alternative options; like free-radio, Internet-based free-radio, iPods, CD's... basically, its not like they are monopolizing an industry that consumers are being forced into... unlike gas, electricity, phone service...

I am hoping that the CEO's have their appeal well-planned out for the FCC prior to hitting the news wires... they aren't stupid and they have made public statements to assure investors that they have it all under control.

We'll see... for people holding stock - you can sell short and grab a few dollars off this news, or stay long in hopes that they pass the FCC's requirements and the merger is approved. If approved, that would be a huge profit. I'll stay long - I am young and dumb; plenty of time to recover from any losses... I'll play risky with this...