SiriusXM Radio has closed its $3.5 billion purchase of Pandora, creating a digital audio colossus that reaches 100 million listeners in North America with $7 billion in 2018 pro-forma revenue. SiriusXM CEO Jim Meyer now leads the combined company, with all Pandora business units reporting directly to him. Roger Lynch, the Sling TV founder and CEO who joined Pandora as CEO 16 months ago, is exiting the company.
In addition to Lynch, three other C-suite execs are leaving Pandora now that the deal has closed: general counsel Steve Bene, CFO Naveen Chopra and chief human resources officer Kristen Robinson.
Pandora’s stock will be delisted from the New York Stock Exchange with each share converted into 1.44 new shares of SiriusXM stock. The satellite broadcaster’s stock will continue to trade under the “SIRI” ticker on the Nasdaq Global Select exchange.
The closing came three days after Pandora stockholders voted to approve the acquisition. The Department of Justice gave its greenlight to the deal Dec. 21.
“This is a tremendous outcome for two organizations with complementary platforms and large audiences, and we could not be more excited to be moving forward as one company,” Meyer said in a statement. “With SiriusXM's subscription-based national service of curated and exclusive content and programming, and Pandora, the largest U.S. streaming music provider with its highly personalized free ad-supported service, under one roof, SiriusXM now reaches more than 100 million people across its audio products.”
The two companies bring complementary business models. SiriusXM derives the vast majority of its revenue from paid subscriptions while Pandora relies mostly on ad dollars from its free streaming service, although it has made progress in building subscription products.
While Meyer said each company’s main products “are not changing,” he also noted that the two companies plan to develop “new unique audio packages that combine our strengths and offer an even wider range of content to our listeners.” In addition, the satcaster says it will bring a more “disciplined and focused approach” to Pandora, which has suffered from decreasing active users and listener hours for some time. Extensive cross-promotion of the two services is planned as the satcaster looks to woo some of Pandora’s 75 million listeners with various paid subscription tiers and to reverse Pandora’s audience declines. The company also sees opportunities by pairing SiriusXM's programming with Pandora's listener personalization technology to deliver audio experiences more tailored to the tastes of each listener.