SiriusXM to buy Pandora streaming radio service for $3.5 billion

Sirius XM Holdings announced Monday that it reached a deal to acquire online streaming service Pandora Media, two services currently available as individual Apple TV apps.

Sirius, which markets itself as Sirius XM, agreed to deliver stock currently worth about $3.5 billion to fully acquire Pandora.

The satellite radio company, which already owns about 15 percent of Pandora, said it would maintain both the Sirius XM and Pandora brands and services. But it also appeared to leave open the possibility of a change in its strategy, saying there would be “no immediate change in listener offerings.”

The combination will help Sirius XM expand beyond an audience that largely listens to the satellite radio company’s programs while driving. SiriusXM has more than 36 million subscribers in North America. Pandora, which provides free and paid music streaming, has more than 70 million monthly listeners. Competitors include privately held streaming service Spotify and Apple Music.

Pandora Premium launched in the spring of 2017 at a price of $9.99 a month. Similar to Apple Music, Pandora Premium subscribers can create playlists, save track favorites and browse personalized music suggestions.

Terms of the deal will allow Pandora to pursue an alternative owner for a higher price, a standard practice in the mergers-and-acquisitions business that could result in the emergence of a different suitor.

“Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists, and the broader content communities,” SiriusXM CEO Jim Meyer said in a press statement. “Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms.”

The deal calls for SiriusXM to pay the equivalent of $10.14 per share for Pandora. Sirius XM and Pandora said the transaction is expected to be completed in the first quarter of next year.