paidContent and mocoNews

Updated: DOJ Clears XM-Sirius; Waiting On FCC; 'Not Likely To Harm Consumers'; NAB 'Astonished'

Discussion Policy
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Joseph Weisenthal
paidContent.org
Monday, March 24, 2008; 10:06 PM

The merger of satellite radio operators Sirius (NSDQ: SIRI) and XM (NSDQ: XMSR) has been cleared by the DOJ. This is a significant hurdle, though FCC approval is still required for the deal to close. That could come soon, if increasingly loud chatter is to be believed. And FCC Chairman Kevin Martin has indicated in the past that the FCC would likely announce its decisions after the DOJ.

From the DOJ's Statement: "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."

The DOJ supported a critical economic point, that the satellite radio operators compete in a market that's bigger than just satellite radio: "The Division found that evidence developed in the investigation did not support defining a market limited to the two satellite radio firms, and similarly did not establish that the combined firm could profitably sustain an increased price to satellite radio consumers."

The two companies, which have been stuck in regulatory purgatory for over a year?the merger was first announced February 19, 2007?are trading up on the news. XM has spiked 13 percent to about $13.50, while Sirius is up about 4.8 percent to $3.04.

WSJ: "While it is unlikely that the FCC will go against the Justice Department's ruling, it has the power to impose conditions that might make the controversial merger slightly more palatable to the groups lined up against it."

Update: Un-astonishingly, the National Association of Broadcasters says it is "astonished" by the DOJ decision, claiming that XM and Sirius have flouted regulations during their entire existence. Statement.

Related

XM And Sirius Extend Merger Agreement Until May 1 Earnings: XM Satellite Continues to Narrow Net Losses; Revs Gain 20 Percent Earnings: Sirius Q4 Revs Up 29 Percent; Net Loss Narrows; Still Waiting On Merger Approval Updated: Sirius Shareholders Approve Merger With XM; XM Vote to Come


© 2008 ContentNext Media Inc.