Satellite radio giants XM and Sirius have reached
an agreement to merge in an all stock deal, it was announced today (Feb. 19).

The new company, which does not yet have a name, will be worth $13 billion
including debt of almost $1.6 billion dollars. XM shareholders will receive
4.6 shares of Sirius common stock for each share of XM they own. Rappers like
Eminem, Grandmaster Flash, 50 Cent and DJ Premier
have channels or shows on Sirius, while XM has deals with rappers like Ludacris,
Snoop Dogg, Talib Kweli, Trick Daddy, Jermaine Dupri and others.

Under the new deal, XM and Sirius shareholders will each own approximately
have of the combined company, which will be lead by Sirius’ current CEO, Mel
Karmazin. "This combination is the next logical step in the evolution of
audio entertainment," said Karmazin, CEO of SIRIUS Satellite Radio. "Together,
our best-in-class management team and programming content will create unprecedented
choice for consumers, while creating long-term value for shareholders of both
companies. The combined company will be positioned to capitalize on Sirius’
and XM’s complementary distribution and licensing agreements to enhance availability
of satellite radios, offer expanded content to subscribers, drive increased
advertising revenue and reduce expenses."

XM and Sirius will continue to operate independently until the transaction
is complete. Both companies will decide the new company’s name and primary business
location. The merger still faces antitrust scrutiny from the Department of Justice.
Also, a clause in the FCC laws state that one satellite radio operator cannot
own the other is expected to be a hurdle. Analysts say the proposed merger has
a 50/50 chance of passing and that the merger is likely to be opposed by the
National Association of Broadcasters.

If approved, the companies expect the transaction to be completed by the end
of 2007.