Technically, it's Sirius Satellite Radio buying out XM Satellite radio for $5 billion. The Justice Department anti-trust division okayed the merger this morning, saying it was unlikely to harm consumers. The deal was approved despite heavy opposition from the NAB and many consumer groups. Shareholders on both sides had approved the deal last November, noting that it would save hundreds of millions in operating costs. The DOJ said the two companies not only compete with each other but with other entertainment technologies and other forms of radio.
The complete Justice Department statement is here...
The NAB is not happy...in a statement released to New Radio Star shortly after the Justice Department Decision Executive VP, Dennis Wharton said
"We are astonished
that the Justice Department would propose granting a monopoly to two companies
that systematically broke FCC rules for more than a decade. To hinge approval of
this monopoly on XM and Sirius's refusal to deliver on a promise of
interoperable radios is nothing short of breathtaking."
XM/Sirius now still have to get an okay from the FCC which still may be weeks away, and may require some conditions on Sirius. But, with the JP okay, it appears that the merger will ultimately happen. The original requirements for satellite radio is that there would always be at least two systems...Will another company dare to grab that license if it is available and try to compete with Sirius? With the billions that both Sirius and XM have lost, another competitor may be a long time coming...if ever.