Pandora sold to Sirius for $3.5 billion

Pandora, the Oakland -based Internet adio pioneer, is about to start streaming a new tune.

On Monday, Pandora said it agreed to be acquired by satellite radio giant Sirius XM for $3.5 billion in an all-stock deal that is expected to close in the first quarter of 2019. However, Pandora and Sirius aren’t strangers, as Sirius already owned about 15 percent of Pandora, which it acquired for $480 million, in 2017

“We’ve made tremendous progress in our efforts to lead in digital audio,” said Pandora Chief Executive Roger Lynch, in a statement announcing the deal. “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 combination brings together two of the largest providers of music-listening services in the their respective fields. Sirius has more than 36 million subscribers across North America, while Pandora said it has more than 70 million monthly listeners, with 6 million of those paying for Pandora’s ad-free, on-demand music-listening options.

Sirius said it will keep the Pandora brand, and offerings, separate from Sirius, but left the door over for possible changes, as it said “there will be no immediate change in listener offerings” after the deal closes.

“This suggests to me that things are going well at Pandora,” said Michael Pachter, Media analyst with Wedbush Securities. “Sirius can take their satellite service, and Pandora from the internet, and offer its users a pretty good combination of satelllite and on-demand options.”

Pandora has been in a turnaround state since Lynch came on board in August 2017. Lynch, a former CEO of Sling TV, took over from Pandora co-founder Tim Westergren after a period in which the company was a late arrival to the subscription music streaming market, and some investors had been calling for the company to explore a sale.