Sirius-XM radio deal gets go-ahead from Justice Dept.

The US Department of Justice has closed its investigation of the proposed merger between the number one and the number two satellite radio operators, XM Satellite Radio and Sirius Satellite Radio, and gave their approval on Monday to the merger of two rival radio networks.

Thirteen months after, the Justice department on Monday (March, 24) approved the $4.2 billion tie-up proposal, saying the merger between Sirius and XM will not create a monopoly in the satellite industry and will likely result in cost benefits for the combined company.

"We determined after a very thorough and comprehensive investigation that we should not challenge the transaction and have closed our investigation," said Assistant Attorney General Thomas Barnett in a conference call announcing the decision. "The evidence did not support a relevant market limited to just the two satellite providers."

The statement further states that although the two networks compete specifically in satellite radio, they also compete with a wide range of other sources of entertainment content delivery for users, including AM/FM radio, high definition radio as well as digital music players such as iPods and even mobile phones that can be connected to home or car audio systems.

In addition, the development of new technologies such as the delivery of Internet radio wirelessly, will make it even more unlikely that the transaction would harm consumers or the companies, the statement continued.

“In several important segments of their business, with or without the merger, the parties simply do not compete today and therefore the merger would not be eliminating any competition between them,” Barnett said.

The proposed all-stock merger was announced by the two companies in February last year, and was opposed by consumer groups and broadcasters who claimed the merger will increase prices and reduce the programming now available from the two competing systems.

Although the two companies have surmounted a major hurdle by winning the DOJ’s approval, but they still require the approval of the Federal Communications Commission. The satellite radio pioneers will have to convince the Commission their merger will not obstruct new competition.

Sirius Satellite Radio is one of two satellite radio services operating in the United States and Canada, along with XM Satellite Radio.

Headquartered in New York City, Sirius provides 69 streams (channels) of music and 65 streams of sports, news and entertainment to listeners. Sirius was previously known as CD Radio. The company changed its name to Sirius Satellite Radio Inc. on November 18, 1999.

XM Satellite Radio Holdings Inc. (XM), on the other hand has more than 160 channels, featuring over 67 commercial-free music channels; 34 news, talk and variety channels; 39 sports channels; 21 instant traffic and weather channels, and one emergency alert channel. XM Radios are available under the brand names Delphi, Pioneer, Alpine, Audiovox, Sony and Polk.