Sirius to merge with XM in $13 billion deal

NEW YORK (Reuters) - Sirius Satellite Radio and XM Satellite Radio are to merge in a $13 billion tie-up that gives subscribers access to entertainers such as Oprah Winfrey and shock-jock Howard Stern, the companies said on Monday.

The merger, which faces regulatory scrutiny, would create a company with 14 million paying customers with access to a wide array of sports, music and entertainment.

Under the terms of the deal, XM stockholders will get 4.6 shares in Sirius for each XM share held. The merger would create a company with an enterprise value of $13 billion, including $1.6 billion in net debt.

The combination creates a company with combined 2006 revenues of about $1.5 billion based on analysts' consensus estimates, Sirius and XM said in a press release.

Veteran media executive Mel Karmazin, currently Sirius CEO, will be CEO of the combined company, and Gary Parsons, now chairman of XM, will hold the same position in the new company. It said Hugh Panero, XM CEO, will continue in his current role until the merger closes.

"This combination is the next logical step in the evolution of audio entertainment," said Karmazin in a statement. He said it will create "unprecedented choice for consumers."

The deal will face tough regulatory scrutiny. The satellite radio licenses prevent one entity from owning them, however Federal Communications Commission Chairman Kevin Martin said last month that its rules are open to change.