Sirius (SIRI) deal with XM Satellite (XMSR) might finally be approved
Posted by: in Latest NewsFiled under: Deals, XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI)
After months of being “almost” approved, it looks like the FCC might give the merger of Sirius (NASDAQ: SIRI) and XM Satellite (NASDAQ: XMSR) its green light. According to The Wall Street Journal, “The staff of the Federal Communications Commission has proposed that the agency approve the merger.”
The two companies may have to negotiate with the bureau on pricing before a final approval is issued. The FCC might put caps on what the newly formed company can charge consumers for the service and satellite receivers may be part of that process.
The real question is whether the approval will come too late to save the companies. Because they operate on different technology platforms, it could take over a year for the merger to gain real cost savings. Worse, each company has over $1 billion in debt. Neither has ever made an operating profit.
Satellite radio is also up against new competition for HD radio and portable media players and multimedia cell handsets. Many of the satellite radios are sold in new automobiles, but auto sales are down sharply.
Getting an “OK” might be better than the months of waiting had been, but the firms may already be in too much trouble for it to matter. .
Douglas A. McIntyre is an editor at 247wallst.com.
Read | Permalink | Email this | Linking Blogs | Comments
Entries (RSS)