Subscription radio company Sirius XM Holdings Inc. recently announced that it would be buying Pandora Media Inc. in a deal valued at about $3.5 billion. The two companies came to an agreement as they face increasing competition from Spotify Technology SA and Apple Inc. Last year, Sirius XM invested $480 million in Pandora, and now represents a stake of about 15 percent in the music-streaming industry.
Music-streaming services have been growing in recent years with Spotify sitting at the top with 83 million paying subscribers as of June. However, Apple Music has been catching up to Spotify in the U.S. while Pandora has the largest audio music-streaming service in the U.S. with 74.7 million active listeners.
The ad-supported music service has struggled, though, as users and ad dollars have switched over to services that allow listeners to play individual songs on demand.
Sirius XM said the new deal would allow it to create audio packages that would be paired to its own content and programming with Pandora’s ad-supported and subscription plans.
Sirius XM also said it expects to close the deal with Pandora by April.
“We believe there are significant opportunities to create value for both companies’ stockholders by combining our complementary businesses,” SiriusXM CEO Jim Meyer said in a statement.
By: Maytinee Kramer
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