In an eradominated by streaming services, SiriusXM isstill managing to thrive, but the satellite radio company is aware that the vast majority of its customers listen in the car. In 2017, SiriusXM began looking to move beyond the automobile, buying a 16-percent stake in streaming service Pandora for $480 million. Now the company is looking to bite off a much bigger piece, as it has moved to acquire Pandora in a $3.5 billion all-stock deal.
This deal may not even happen, however. While SiriusXM expects the deal to close in the first quarter of 2019, the deal does include a “go-shop” provision. This allows Pandora to “actively solicit, receive, evaluate, and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement,” so it’s possible that another company could swoop in with a better deal.
“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,” SiriusXM CEO Jim Meyer said in the press release announcing the acquisition. “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.”
No matter what, this could be a big win for Pandora. The service has been on an upswing as of late, offering new features likepersonalized playlist The Drop, which allows it to bettercompete directly with Spotify. Adding the resources of a larger company may be just what the service needs to turn the “big two” streaming services — Spotify and Apple Music — into a “big three.”
