XM-Sirius radio deal gets federal approval

March 24, 2008 1:22:02 PM PDT
The United States Justice Department approved Sirius Satellite Radio's $5 billion buyout of rival XM Satellite Radio, saying the deal isn't likely to hurt competition or consumers.The decision comes despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry.

A buyout received shareholder approval in November. The companies said the merger will save hundreds of millions of dollars in operating costs - savings that will ultimately benefit their customers.

The Justice Department said the two companies compete not just with each other but also with other forms of radio and entertainment.

"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. "Accordingly, the division has closed its investigation of the proposed merger."

XM Satellite shares rose $1.97, or 16.5 percent, to $13.90 in afternoon trading after the government's announcement while Sirius shares rose 28 cents, or almost 10 percent, to $3.18.