Sirius Satellite Radio's proposed acquisition of XM Satellite Radio passed a major speedbump today with the Department of Justice giving it the ok. The Department of Justice finished its very thorough investigation and found that there is not evidence that the merger would substantially lessen competition or harm the consumer. This is not the only hurdle that this proposed deal had to clear. There still has been no word from the FCC, but most analysts believe that the Justice Department was the biggest threat to stopping the merger.
XM (Nasdaq:XMSR) and Sirius (Nasdaq:SIRI) both saw their stocks surge today by 15.5% and 8.6% respectively as investors cheered this long awaited news. Many feel that if these two are able to team up it will make a very formidable company that can have a stranglehold on the still fast-growing satellite radio space.
What would this proposed merger mean for the overall market? This deal itself probably wouldn't mean a whole bunch to the market, but it is bigger than that. The fact that a major merger would go through would likely encourage other potential deals in the future. When major deals go through, other companies are watching and reading into the words of the Justice Department.
This was a case that the DOJ took an unprecedented amount of time to consider, so it seems unlikely that the FCC would find something different that would derail this merger. Satellite radio will likely have a different look to it in the coming years, and it looks like there will be one massive market leader in that area. While there will continue to be lots of debate on whether this merger should go through, it appears the major roadblock is slowly moving out of the way.
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