XM Satellite, Sirius merger clears Justice Department hurdle

By Lisa Kerner

Charlotte, N.C., March 24 - The U.S. Department of Justice's Antitrust Division concluded that the proposed merger of XM Satellite Radio Holdings Inc. with Sirius Satellite Radio Inc. is not likely to substantially lessen competition and that the transaction is not likely to harm customers.

The Antitrust Division closed its investigation of the XM/Sirius merger after reviewing millions of documents, according to a government statement released on Monday.

XM and Sirius are not likely to compete with respect to many segments of the satellite radio business even in the absence of the merger, the statement said.

While the companies have competed for new subscribers in the past, there has never been significant competition between them for customers who have already subscribed to one or the other service and purchased the required equipment, the government determined.

Regarding new subscribers, XM and Sirius sell satellite radios and service primarily through car manufacturers that install the equipment in new cars and mass-market retailers that sell automobile aftermarket equipment.

On Feb. 20, 2007, Sirius and XM entered into a definitive agreement to combine in a tax-free, all-stock merger of equals valued at an estimated $13 billion, including net debt of about $1.6 billion.

As previously reported, XM shareholders will receive 4.6 shares of Sirius common stock for each share of XM they own.

Sirius shareholders and XM shareholders have already approved the transaction, it was previously reported.

The companies recently extended the termination date of their merger agreement to May 1.

Sirius is a New York-based satellite radio service provider. XM is a satellite radio services company located in Washington, D.C.

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