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Sirius plan to buy XM gets antitrust approval
|25 марта 2008|
Sirius Satellite Radio's $4.59 billion purchase of rival XM Satellite Radio was given antitrust clearance on Monday as the Justice Department concluded consumers have many alternatives, including mobile phones and personal audio players.
The deal, announced in February 2007, would combine the only two providers of satellite radio in the United States and is still being reviewed by the Federal Communications Commission.
"Competition in the marketplace generally protects consumers and I have no reason to believe that this won't happen here," Justice Department antitrust chief, Thomas Barnett, told a conference call with reporters.
The traditional radio industry, consumer groups and some U.S. lawmakers had criticized the deal as anticompetitive.
The FCC must determine whether the XM-Sirius is in the public interest, and whether to enforce its 1997 order barring either satellite radio company from acquiring the other.
A source at the FCC said FCC Chairman Kevin Martin has yet to make a proposal either approving or opposing the XM-Sirius combination, but has asked the agency's staff to draft documents for different possible outcomes.
This source said the FCC could be strongly influenced by the Justice Department accepting the satellite radio companies argument that they face stiff competition from traditional AM/FM radio, high-definition radio, MP3 players and audio delivered by mobile phones.
"I think it would be hard to go in the complete opposite direction (from the Justice Department)," said the source.
The companies have disputed the idea that the FCC's 1997 order would prohibit their merger.
Analysts expressed optimism of FCC approval, although some said the agency might impose conditions on the deal.
"We all along thought the probability was better than 50 percent that the deal would get through. Now it's past DOJ, and we feel pretty optimistic it will get through the FCC," said David Bank, an analyst with RBC Capital Markets.
The long-awaited decision sent shares of XM and Sirius sharply higher.
XM stock ended up 15.5 percent to $13.79, while Sirius closed up 8.6 percent to $3.15, both on Nasdaq. At that price for Sirius' stock, the deal, in which 4.6 shares of Sirius are to be exchanged for each XM share outstanding, is worth $4.59 billion.
Sirius and XM, which are losing money, currently charge subscribers about $13 a month for more than 100 channels of news, music, talk and sports.
The Justice Department's decision provoked immediate criticism from a key lawmaker in Congress, Senate antitrust subcommittee chairman Sen. Herb Kohl, a Wisconsin Democrat.
Kohl took the department to task for "failing to oppose numerous mergers which reduced competition in key industries, resulting in the Justice Department not bringing a single contested merger case in nearly four years."
"We urge that the FCC find the merger contrary to the public interest and exercise its authority to block it," Kohl said in a statement.
Sirius and XM said in a brief statement that they had received antitrust clearance and that their deal was still subject to FCC approval.