SiriusXM, Pandora Create Largest Audio Entertainment Company

SiriusXM Monday announced that it intends to acquire Pandora in an all-stock transaction, valuing Pandora at $3.5 billion. The transaction is still subject to approval by Pandora stockholders

Pollstar reports the combination of Pandora active monthly user base of 70 million and SiriusXM's 36 million-plus subscribers across North America, and 23 million-plus annual trial listeners, would create "the world's largest audio entertainment company, with more than $7 billion in expected pro-forma revenue in 2018 and strong, long-term growth opportunities," according to the announcement made on Monday, Sept. 24.

All brands, products and services by both companies are to continue unchanged. While Pandora intends to benefit from SiriusXM's, industry expertise and financial resources, the satellite radio company can count on Pandora's mobile strength, digital presence and advertizing capabilities.

What is more, the deal will get Pandora into the car – and the estimated $16M advertizing market for FM radio – which has been a big goal of the company, as Pandora CEO Roger Lynch said earlier this year.

SiriusXM will be able to expand its presence beyond vehicles into the home and other mobile areas.

The combined company will capitalize on cross-promotion opportunities between their user base, which would represent the largest digital audio audience in the U.S. once the deal's through.

The transaction is expected to close in the first quarter of 2019. It is subject to approval by Pandora stockholders, expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and certain competition laws of foreign jurisdictions and other customary closing conditions.

Other plans include "leveraging SiriusXM's exclusive content and programming with Pandora's ad-supported and subscription tiers to create unique audio packages, continuing investments in content, technology, innovation, and expanded monetization opportunities through both ad-supported and subscription services in and out of the vehicle, supporting and strengthening Pandora's highly relevant brand, creating a promotional platform for emerging and established artists, curated and personalized in ways to deliver the most compelling audio experience that connects artists to their fan bases, as well as new listeners," according to the announcement.

For every share of Pandora they own, shareholders will get 1.44 of newly issued shares of Sirius XM, the companies said in their announcement Monday. SiriusXM owns about 15 percent of convertible preferred Pandora stock.