Pandora Is Being Sold for $3.5 Billion

Cornelia Mascio
Settembre 24, 2018

Subscription satellite radio company SiriusXM says it's buying music streaming service Pandora Media in an all-stock deal valued at about $3.5 billion that'll allow it to expand its service beyond cars and into homes and other mobile areas. The transaction follows last year's move by Sirius to spend $480 million for a 15% stake in Pandora.

"SiriusXM and Pandora are continuing to provide the content, products and services you expect from us". Unlike most competing platforms, the new SiriusXM subsidiary has three types of music streaming services, including a free, ad-supported tier, a Plus, and a Premium option.

Broadcast radio, which has been feeling the same pressure from streaming, will now also have to fend off the combined strength of SiriusXM and Pandora.

"We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses", Jim Meyer, Sirius XM's CEO, said in a press release.

The launch of Pandora in 2000 was revolutionary for introducing music fans to new artists, creating playlists based on a song or artist of an individual's choosing.

"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 auto even further". The deal will reportedly close in early 2019, but Pandora reservices the right to "actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement". Based on the 30-day volume-weighted average price of $7.04 per share of SIRIUSXM common stock, the implied price of PANDORA common stock is $10.14 per share, representing a premium of 13.8% over a 30-day volume-weighted average price. In a statement, SiriusXM said that the acquisition will be an all-stock transaction. It still needs approval from Pandora shareholders.

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