$13B USD XM, Sirius Merger Approved by Justice Department

[Mugu]

Shane McGlaun (Blog)

Sirius and XM announced last year that the companies wanted to merge radio operations into one large satellite radio provider. It has taken over a year to find out if the XM/Sirius baby would be stillborn. However, the Justice Department today gave its seal of approval for the merger.

"After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers," said the Department of Justice's Antitrust Division in a statement.

"The Division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons, including: a lack of competition between the parties in important segments even without the merger; the competitive alternative services available to consumers; technological change that is expected to make those alternatives increasingly attractive over time; and efficiencies likely to flow from the transaction that could benefit consumers."


Complete article at:
http://www.dailytech.com/13+Billion+USD+XM+Sirius+Merger+Approved+by+Justice+Department/article9881.htm

[MiniMe]

1. Did the house and Senate already approve it?

If so, I missed it. But I know they are part of the approval project.

[TheUniverse]

3. About competition?

"After a careful and thorough review of the proposed transaction, the Division concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers," said the Department of Justice's Antitrust Division in a statement."


WTF? How is that not likely to substantially lessen competition? XM and Sirius are the only major satellite radio providers around. This wont just lesson competition. There will be no competition. This would be like if News Corp decided to buy CNN, NBC, ABC, and CBS all in the same day. Now we have 1 provider for satellite radio. Watch as progressive voices start to disappear and prices double.

[ProudToBeBlueInRhody]

4. Except both were about to go under

You would have actually had less progressive voices if both just went out of business.

[TheUniverse]

9. Dont you find it funny that...

The government has no problems bailing out large banks and weapons makers etc, but they dont care about companies who are to present to new media? Is this our government's priorities?

[MiniMe]

8. That is the justice department. I know that the house and senate were

holding hearings on it. I thought they had to approve it before it could take effect. My question was if the house or senate approved it. Its entirely possible that I missed it, just wondered.

[drbtg1]

13. Sorry but there will still be competition

In addition to traditional AM and FM, there is HD radio which has no monthly fee. Also, my car's head unit does Bluetooth which does more than just phone calls. I can set my phone to play audio from the internet and listen to it with my car's speakers.

You said "Watch as progressive voices start to disappear". Have you heard Alex Bennett or Lynn Samuels?

[spanone]

2. great! another monopoly sanctioned by govt.

[Zywiec]

5. A monopoly on satellite radio?

Oh please. Like satellite radio is something that everyone needs to survive.

When riding in your car you can choose regular radio, satellite radio, CDs, an MP3 player or all sorts of entertainment. How is this going to hurt anyone?

[ProudToBeBlueInRhody]

6. Seriously.....

No one is rushing to jump on the bandwagon of starting a new satellite radio company. XM and Sirius did, lost a lot of money doing it, and that's why they have to merge.........

[soothsayer]

10. Took over a year to approve this, unlike Exxon Mobile, Maytag Whirlpool, Jp Morgan Bear Stearns

which get approved instantly, it seems

[sharesunited]

7. They changed the rules to get his done.

Allocation of the satellite radio spectrum was supposed to ensure a duopoly, at a minimum. I don't have any problem with Sirius and XM merging, but they need to divest of frequencies so that other entrants to the satrad marketplace can come in. This has always been the rule in cellular, and it has served the public interest.

[soothsayer]

12. I think they're going to have to give back part of the spectrum

[KharmaTrain]

11. More Bad Money Thrown After Bad...

Satellite Radio has been a disaster from the outset. The two companies spent way too much in their start-ups and promised investors numbers they could never deliver. Then they went out and threw money at big names in hopes that would get some new blood...and the red ink flowed. Even Howard Stern has been a bust-out...the satellite services are a boutique service and will never be the mainstream power they hoped to be.

While I'm sure there are some DU'ers here who have satellite and love it...but the subscription numbers have been flat for a long time and renewals are tougher to get. People are used to free radio and local. It's also been hurt by internet radio that offers a lot more listener variety and reaches far more people...wireless internet that is putting internet radio into cars, cellphones and other portable devices will cut into satellite even further.

I expected the DOJ to roll over, as usual, as the pressure is on this regime by its broadcast benefactors. This is the pro in the quid pro quo...but a small and hollow victory.