Oprah Winfrey's latest coworker: Howard Stern. Though they probably won't be logging too much time together around the office watercooler.
Sirius Satellite Radio and XM Satellite Radio, the respective home bases of Stern and Winfrey and the two country's two largest satellite radio services, announced plans to combine Monday in what would amount to a $13 billion "merger of equals."
The deal, which still requires regulatory approval, would see XM shareholders receiving 4.6 Sirius shares for each XM share they hold, with the total stock changing hands valued at $4.6 billion.
The merger, expected to be made official by the end of the year if it clears antitrust obstacles, would effectively cull programming from both services and make it available via one service to both sets of customers, roughly 14 million subscribers. Both companies saw an increase in their subscriber base over the past year: XM increasing 29 percent to 7.63 million customers and Sirius' base increasing an impressive 82 percent up to 6 million. However, the subscriptions haven't offset the huge losses sustained by the companies in their contentious battle to become the primary satellite radio provider in an iPod universe.
"We are excited for the many opportunities that an XM and Sirius combination will provide consumers," XM chairman Gary Parsons and CEO Hugh Panero said in a joint statement. "The combined company will be better positioned to compete effectively with the continually expanding array of entertainment alternatives."
Sirius CEO Mel Karmazin agreed, saying, "This combination is the next logical step in the evolution of audio entertainment."
There are some hitches, however. The proposed merger has to be approved by both companies' shareholders, the Justice Department and the FCC. The companies must show that the deal would not violate antitrust regulations and would benefit consumers.
"The hurdle here, however, would be high," FCC chairman Kevin Martin said of the two companies, "as the commission originally prohibited one company from holding the only two satellite radio licenses. The companies would need to demonstrate that consumers would clearly be better off with both more choice and affordable prices."
Karmazin, who is also responsible for signing Sirius' $500 million five-year deal with Stern, would be named the new company's CEO, while XM's Parsons would serve as the new company's chairman.
But even if the merger is approved by the government and shareholders, another fight could be looming.
The National Association of Broadcasters quickly slammed the proposed deal Monday, saying it was marshaling forces to defeat any merger.
"In coming weeks, policymakers will have to weigh whether an industry that makes Howard Stern its poster child should be rewarded with a monopoly platform for offensive programming," the group said. "We're hopeful that this anti-consumer proposal will be rejected."