New York — Sirius Satellite Radio today announced its stockholders approved the pending merger with XM Satellite Radio with more than 96 percent of the shares voting in favor of the transaction.
The vote was held at a special shareholders meeting today.
XM shareholders will also vote on the merger later today at 3 p.m.
Sirius chairman and CEO Mel Karmazin said, “We are pleased with the outcome of today’s vote. The approval by Sirius stockholders of our merger with XM represents a significant step in the approval process … We look forward to completing the merger by the end of the year.”
The merger must also be approved by the Federal Communications Commission (FCC) and the Department of Justice (DoJ). The FCC is charged with determining if the merger would be in the public interest and the DoJ is charged with determining if the merger would be anticompetitive.
While the many Congressional members have voiced opposition to the merger, some analysts believe it has a 60 percent to 70 percent chance of passing federal regulation. Many expect the merger could be approved by the end of the year. If the FCC adheres to its time clock, its ruling would come in early December.
XM stockholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM they own. XM and Sirius stockholders will each own approximately 50 percent of the combined company.
Sirius CEO Mel Karmazin said in Nov. 9 interview with the Chicago Tribune that Sirius will sue if the FCC does not approve the merger. A Sirius/XM spokesman confirmed the statement but offered no elaboration.
Today, XM and Sirius reported that former FCC chairman Reed Hundt voiced support for the merger in an interview on Nov. 9. Hundt was chairman at the time the FCC set the rules for satellite radio licenses in 1997.
A satellite radio statement quoted Hundt as saying on Sirius and XM: “These two firms have proved when kept apart to be incapable of mounting the really serious competition against … terrestrial radio that I had always hoped for. And it seems to me that there's no indication of any anticompetitive outcome if they do combine, so let's give them a chance to have a sharper point on the arrow and see if they can do better in terms of penetrating the listener audience.”
Hundt also addressed the original FCC policy on satellite radio that states “one licensee will not be permitted to acquire control of the other remaining satellite DARS license.”
Hundt said, “It was never the case that these service rules were intended to be written [in] concrete or, like the Constitution of the United States, changed only through an elaborate process. It was an attempt to figure out a good way to get the satellite radio industry off to a pro-competitive start and then in the fullness of time the FCC and the parties and the people in the industry would be able to see, well, what works and what doesn't work, what's happening and what isn't happening.”
The interview was filed today with FCC said a spokesman for XM and Sirius.
XM also said today that it won the "2007 Best of What's New Award" from Popular Science magazine for its XpressRC.