Radio giant SiriusXM has announced it is to acquire Pandora in a $3.5 billion (£2.7bn) deal.
This strategic transaction, which is expected to close in Q1 2019, builds on SiriusXM's position as the leader in subscription radio and creates the world's largest audio entertainment company, "with more than $7 billion [£5.3bn] in expected pro-forma revenue in 2018 and strong, long-term growth opportunities".
Pandora's music platform will enable SiriusXM to signicantly expand its presence beyond vehicles into the home and other mobile areas.
Jim Meyer, chief executive officer of SiriusXM, said, "We have long respected Pandora and their team for their popular consumer offering that has attracted a massive audience, and have been impressed by Pandora's strategic progress and stronger execution. We believe there are significant opportunities to create value for both companies' stockholders by combining our complementary businesses.
"The addition of Pandora diversifies SiriusXM's revenue streams with the US's largest ad-supported audio offering, broadens our technical capabilities, and represents an exciting next step in our efforts to expand our reach out of the car even further. 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. 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."
Pandora forecasts revenue of $390m (£297m) to $405m (£308m) in Q3 2018.
Roger Lynch, chief executive officer of Pandora, said, "We've made tremendous progress in our efforts to lead in digital audio. 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 powerful combination of SiriusXM's content, position in the car, and premium subscription products, along with the biggest audio streaming service in the U.S., will create the world's largest audio entertainment company. This transaction will deliver significant value to our stockholders and will allow them to participate in upside, given SiriusXM's strong brand, financial resources and track record delivering results."
