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SiriusXM to Buy Pandora for $3.5 Billion SiriusXM to Buy Pandora for $3.5 Billion in Bid to Expand Reach
(about 1 hour later)
The satellite radio provider SiriusXM said on Monday that it had agreed to acquire the struggling music streaming service Pandora Media for $3.5 billion. Satellite radio provider Sirius XM said on Monday that it would acquire music streaming service Pandora Media for $3.5 billion, in a bid to corral listeners who don’t want to pay for premium channels.
SiriusXM, which is owned by Liberty Media, announced that it was buying Pandora in an all-stock transaction. Pandora rose to success by providing tailored radio stations for its users that were sprinkled with ads. In recent years it has struggled to compete with rival services like Spotify and Apple Music, which dominated online music streaming by offering paid on-demand content — something Pandora was slow to replicate.
Pandora has struggled to grow in recent years as rivals like Spotify and Apple Music have dominated online music streaming. Many people have wondered whether it was too late to turn the company around. Pandora has been a potential acquisition target for at least two years: In 2016, a continued slide in its share price prompted it to look for possible buyers, and Sirius XM has been in the running to buy Pandora since it injected $480 million of funding into the company last year.
SiriusXM has been in the running to buy Pandora since it injected $480 million of funding into the company last year. The investment allowed Pandora to cover basic expenses, and also spurred a shake-up in the executive ranks that brought in Roger Lynch, Pandora’s fourth chief executive in four years. The investment allowed Pandora to cover basic expenses, and also spurred a shake-up in the executive ranks that brought in Roger Lynch, Pandora’s fourth chief executive in four years.
SiriusXM has more than 36 million subscribers across North America, and Pandora has more than 70 million monthly active users. The companies will use the merger to cross-promote their services. On a call with analysts, Jim Meyer, Sirius XM’s chief executive, said that the acquisition would enable Sirius to try to keep listeners who did not want to pay for music b y diverting them toward Pandora’s free ads-based model.
“The addition of Pandora diversifies SiriusXM’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 car even further,” Jim Meyer, the chief executive of SiriusXM, said in a statement. “The truth is the majority of triallers ultimately decide not to pay for our service,” Mr. Meyer said. “As I’ve said many times, we would benefit from having a free funnel.”
Sirius XM has 36 million subscribers across North America and more than 23 million listeners on trials. The companies said that combined with the 70 million monthly active users on Pandora, this would create the largest digital audio audience in the United States.
Sirius XM, which is controlled by Liberty Media, announced that it was buying Pandora in an all-stock transaction. Shares of Pandora rose about 9 percent in early trading on Monday.