Sirius Satellite Gets Approval to Buy Rival XM

Sirius Satellite Radio received approval from the Justice Department to purchase XM Satellite Radio for $5 billion. Determining the deal would not hurt consumers or competition, the Justice Department approved without conditions the deal which will now go before the Federal Communications Commission for approval. The proposed buyout is facing opposition from consumer groups as well as the land-based radio industry which has been lobbying to stop the merger. In a statement detailing their decision, The Justice Department backed the decision to approve the deal saying the companies compete not just with each other but with all forms of radio and entertainment so it is doubtful it will create a monopoly. In addition, customers must purchase equipment compatible with their provider making it unlikely a subscriber would switch providers. “The likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term,” the Justice Department said. Last November shareholders voted to approve the deal convinced by the companies that the merger would reduce operating costs by hundreds of millions of dollars. Sirius and XM claim that the merger will offer their customers better pricing options and more flexibility in the plans they can choose from. They’ll also have access to more channel lineups that are currently divided by the two companies. Opposing consumer groups aren’t convinced these promises by the companies will become the reality and have expressed great disappointment in The Justice Departments approval of the merger. XM Satellite shares rose 15 percent while Sirius was up 8.6 percent.