Corporate Finance Merger Analysis Sirius Xm Radio
Justin Kaufman-2056713
Lecturer- Stephen Chandler
Corporate Finance
Merger Report
Sirius XM inc.
Table Of Contents 1. Coversheet 2. Table of contents 3. Introduction 4. History Of The Industry/History Of the Companies 5. History Of The Companies 6. History Of The Companies 7. Type Of Merger/Reasons for merger 8. Reasons for merger 9. Shareholder Reaction/Finance
10.Regulation Authority/ Wider Reactions
11.Success/Failure Of Merger
12.Conclusion
13.Bibliography
14.Appendices
Introduction
This report is about the creation of the sattelite radio industry, and its only two operating companies Sirius Sattelite Radio, and XM Radio. These companies, despite obvious duopoly advantages and some early succeses, were too heavily leaden with debt, resulting in a controversial merger worth billions. Even after the merger the company struggled to cope. I chose this company because of the interesting nature of these two companies with an immediate duopoly of the newly created industry, and the controversial nature of the decision that allowed them to merge.
History of the industry The digital radio industry began with the creation of digital audio radio service (dars) which was established by the fcc in 1992 by reserving certain segments of radio frequency for sattelite broadcast onto the radio. An auction was held in 1997 after 5 years of negotiations with four competitors, after which only two companies were licensed for use of these frequencies, both of which paid around 90m us dollars.
History of the companies
Xm radio
Xm radio, formerly known as american mobile radio began broadcasting in september 2001 using their two geostationary sattelites “rock” and “roll”. Within months fortune magazine named xm radio product of the year, was named invention of the year by Time, and “best of whats new” from popular science, among a myriad of others.
By 2002 XM broadcast to the entire united states, but were
Lecturer- Stephen Chandler
Corporate Finance
Merger Report
Sirius XM inc.
Table Of Contents 1. Coversheet 2. Table of contents 3. Introduction 4. History Of The Industry/History Of the Companies 5. History Of The Companies 6. History Of The Companies 7. Type Of Merger/Reasons for merger 8. Reasons for merger 9. Shareholder Reaction/Finance
10.Regulation Authority/ Wider Reactions
11.Success/Failure Of Merger
12.Conclusion
13.Bibliography
14.Appendices
Introduction
This report is about the creation of the sattelite radio industry, and its only two operating companies Sirius Sattelite Radio, and XM Radio. These companies, despite obvious duopoly advantages and some early succeses, were too heavily leaden with debt, resulting in a controversial merger worth billions. Even after the merger the company struggled to cope. I chose this company because of the interesting nature of these two companies with an immediate duopoly of the newly created industry, and the controversial nature of the decision that allowed them to merge.
History of the industry The digital radio industry began with the creation of digital audio radio service (dars) which was established by the fcc in 1992 by reserving certain segments of radio frequency for sattelite broadcast onto the radio. An auction was held in 1997 after 5 years of negotiations with four competitors, after which only two companies were licensed for use of these frequencies, both of which paid around 90m us dollars.
History of the companies
Xm radio
Xm radio, formerly known as american mobile radio began broadcasting in september 2001 using their two geostationary sattelites “rock” and “roll”. Within months fortune magazine named xm radio product of the year, was named invention of the year by Time, and “best of whats new” from popular science, among a myriad of others.
By 2002 XM broadcast to the entire united states, but were
Bibliography: Markels, Alex, "100 Channels, But Where Are the Subscribers?," New York Times, November 3, 2002, p. C4. http://www.fundinguniverse.com/company-histories/XM-Satellite-Radio-Holdings-Inc-company-History.html -"Fledgling Satellite Radio Providers Incur Setbacks with Launch and Chipset Delays," Satellite News, January 15, 2001, p Helyar, John, "Radio 's Stern Challenge," Fortune, November 1, 2004, p. 123. Lewis, Peter, "Sirius Competition," Fortune, June 23, 2003, p. 130. Savitz, Eric J., "In Satellite Radio, a Sirius Discrepancy," Barron 's, January 12, 2004, p. T1. Sheng, Ellen, "Sirius Bolsters Lineup to Battle XM," Wall Street Journal, June 2, 2004, p. 1. Hazlett, Thomas (2007-06-14). "The Economics of the Satellite Radio Merger" http://www.bizjournals.com/denver/stories/2009/02/16/daily9.html