SiriusXM— the satellite radio company—announced Monday that it will acquire Pandora Media for $3.5 billion, in an all-stock transaction that will create what the company claims will be the largest audio entertainment company.
Pandora introduced users to streaming before Apple Music, Spotify, and TIDAL crowded the online music world. Once a leader in digital audio the company now looks to ensure its longevity in a move that will help SiriusXM transition to digital.
SiriusXM already struck a deal to invest $480 million in Pandora last year, giving the company a 19 percent stake as it sought to compete in the personalized streaming music market
“We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora’s strategic progress and stronger execution,” says Jim Meyer, CEO of SiriusXM said in the release.
There will be no immediate changes to Pandora’s more than 70 million monthly active listeners. The new deal nearly doubles Sirius XM’s 36 million followers, of which 5.6 million are paid subscribers. More than 23 million listeners are annual trial users
Pandora, which has struggled as advertisers and listeners have migrated to other streaming services, lost $221 million in the first half of this year.
“We’ve made tremendous progress in our efforts to lead in digital audio,” said Roger Lynch, CEO of Pandora in the release. “Together with SiriusXM, we’re even better positioned to take advantage of the huge opportunities we see in audio entertainment, including growing our advertising business and expanding our subscription offerings.”
The new acquisition is expected to close in 2019, pending Pandora board approval.