SiriusXM buys Pandora for $3.5B

Satellite radio provider woos online streamers.

On-demand audio continues to shake up the radio business as Sirius XM Holdings announced Monday it reached a deal to acquire online streaming service Pandora Media.

Sirius, which markets itself as SiriusXM, agreed to deliver stock currently worth about $3.5 billion to fully acquire Pandora.

The satellite radio company, which already owns about 15 percent of Pandora, said it would maintain both the Sirius XM and Pandora brands and services. But it also appeared to leave open the possibility of a shift, saying there would be “no immediate change in listener offerings.”

The deal comes as the radio industry grapples with digital competition in the form of streaming music apps and podcasts. SiriusXM and Pandora have competed for business.

SiriusXM has more than 36 million subscribers in North America. Pandora, which provides free and paid music streaming, has more than 70 million monthly listeners.

Competitors include streaming service Spotify and tech giant Apple Music.

Terms of the deal will allow Pandora to pursue an alternative acquirer for a higher price, a standard practice in the mergers-and-acquisitions business that could result in the emergence of a different suitor.

SiriusXM hopes the deal will help it diversify its business by further extending its reach outside of car radio subscriptions.

“Through targeted investments, we see significant opportunities to drive innovation that will accelerate growth beyond what would be available to the separate companies, and does so in a way that also benefits consumers, artists, and the broader content communities,” SiriusXM CEO Jim Meyer said in a statement.

“Together, we will deliver even more of the best content on radio to our passionate and loyal listeners, and attract new listeners, across our two platforms.”

The deal calls for SiriusXM to pay the equivalent of $10.14 a share for Pandora.