Satellite Radio Deal Puts Focus on Regulators

After Sirius and XM, the United States' two satellite radio services, announced plans Monday to merge in a $13 billion deal, speculation quickly turned to how regulators would react to such a combination. The proposal brought immediate comparisons to the proposed merger of satellite television broadcasters EchoStar and DirecTV, which regulators rejected four years ago. But Sirius chief executive Mel Karmazin wasted no time asserting that this deal was completely different.Rebecca Arbogast, a telecom analyst for Stifel Nicolaus, told the Washington Post that XM and Sirius were wise to time the deal so that it could be completed before Democrats have the chance to win the presidency. Even so, Jonathan Jacoby, an analyst at Banc of America Securities, cautioned that this transaction could be held up in regulatory red tape for a long time. Breakingviews also sees regulatory static ahead. The New York Post reported that the 50-50 structure of the XM-Sirius deal was no accident. Mr. Karmazin said the deal hinged on getting each side to "swallow their pride" rather than jockeying for a majority of the new company's equity.Go to Item from DealBook>>
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