New York — Sirius and XM formally announced the completion of their merger today, unveiled Sirius XM Radio as the name for the merged companies and introduced its board of directors.
The merger, called “one of the most heavily conditioned” in the history of the Federal Communications Commission (FCC) by Commissioner Robert M. McDowell, took 412 days to work its way through the approval process.
With final approval received, Sirius XM released the names of those expected to serve on the new company’s board of directors. According to a filing by XM with the Securities Exchange Commission, they are:
Gary Parsons (chairman of the new company)
Mel Karmazin (CEO of the new company), Lawrence Gilberti, James Holden, James Mooney, Leon Black, Eddy Hartenstein (former DirecTV vice chairman), Joan Amble, Jack Shaw, Jeffrey Zients, Chester Huber (president of OnStar) and John Mendel.
Karmazin, Gilberti, Holden, Mooney and Black served on Sirius’ board while the remainder served on XM’s board of directors.
Sirius and XM directors of note not included are former Sirius chairman Joe Clayton and XM president and CEO Nate Davis.
Karmazin said, “I am delighted to announce the completion of this exciting merger between Sirius and XM. We have worked diligently to close this transaction, and we look forward to integrating our best-in-class management teams and operations.”
The company, with 18.5 million subscribers at the outset, will be the second-largest U.S. radio company in revenue (behind Clear Channel) and the second-largest subscription media company behind Comcast, it said.
The first of the new service packages for satellite radio promised to the FCC will be offered this fall, said Karmazin, noting he expects many consumers will opt for a Best of Both programming package that offers one full service plus some programs of the other. “Given the respective popularity of exclusive programming on both Sirius and XM, we expect many subscribers will upgrade their current subscription.”
Current radios will continue to work, and many of the new service packages will not require new radios. A la carte packages, due within three months, will require new radios.
Corporate headquarters for the new company will be based in New York while XM, now a wholly owned subsidiary, will remain headquartered in Washington.
Sirius XM reiterated guidance that it expects to achieve net synergies of $400 million in 2009 and said it will begin realizing synergies immediately. It also said it is “moving quickly to integrate operations,” according to Karmazin.
After the close of the market yesterday, XM common stock ceased trading on the Nasdaq.
XM shareholders will receive 4.6 shares of Sirius common stock for each share of XM.
In other guidance, Sirius XM said it expects to post adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) exceeding $300 million in 2009, and to achieve positive free cash flow, before satellite capital expenditures, for the full year 2009.