SiriusXM presses play on deal with Pandora Media

SiriusXM presses play on deal with Pandora Media

The transaction follows last year's move by Sirius to spend $480 million for a 15% stake in Pandora.

SiriusXM is planning on acquiring Pandora for $3.5B.

Still, Pandora has found itself in a hard position in the streaming market as alternatives like Apple Music (aapl) and Spotify (spot) continue to attract more members.

SiriusXM is buying Pandora in a $3.5 billion all-stock deal. Unlike most competing platforms, the new SiriusXM subsidiary has three types of music streaming services, including a free, ad-supported tier, a Plus, and a Premium option. SiriusXM's 36 million North American subscribers, their 23 million-plus annual trial listeners, and Pandora's 70 million active monthly users combined are "the largest digital audio audience in the U.S".

Meanwhile, the deal will help SiriusXM tap into Pandora's mobile strength while giving it the chance to improve in areas such as making personalized listening recommendations.

This is significant not to just radio, but to streaming music as well.

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"The addition of Pandora diversifies Sirius XM's revenue streams with the U.S.'s largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the auto even further".

"Supporting and strengthening" Pandora's "highly relevant" brand is another (vague) long-term objective, with investments in "content, technology, innovation, and expanded monetization opportunities through both ad-supported and subscription services in and out of the vehicle" set to continue. As stated earlier, Pandora has not been doing so well, so it will be important that the company leverages its SiriusXM content and reach to make the brand stronger.

Lynch also said in the same statement: "We've made tremendous progress in our efforts to lead in digital audio".

SiriusXM is hoping to build the "world's largest audio entertainment company" with some help from Pandora.

Pandora shares have risen 2% on the deal news to $9.29, but Sirius investors appear to be anxious about the steep price of the deal, sending Sirius shares down more than 8% to about $6.40.

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