SiriusXM is buying Pandora in a $3.5 billion all-stock deal.
The deal will create the world’s largest audio entertainment company, the companies said early Monday.
SiriusXM has 36 million subscribers in North America. It was formed with the merger of the Sirius and XM satellite radio services in 2008.
Sirius had paid Howard Stern hundreds of millions of dollars to lure him from traditional radio in 2006. The combined company has built a stable of stars with exclusive programming to go along with its lineup of music, news, talk and sports.
Pandora, founded in 2000, was a groundbreaking streaming music service. It has more than 70 million monthly active users.
Pandora stockholders will receive 1.44 newly issued SiriusXM shares for each Pandora share they own. Pandora has a “go-shop” period in which it can solicit other offers from third parties.
Both companies’ boards have approved the transaction, which is expected to close in 2019’s first quarter. It still needs approval from Pandora shareholders.
Shares of Pandora, based in Oakland, California, jumped more than 8 percent in Monday premarket trading. SiriusXM’s stock declined 4 percent.
