It's been more than two years since we first reported that XM and Sirius were in talks to merge, and although the New York Post may have jumped the gun a bit way back then, it was certainly on the money today, as the two satellite radio pioneers have just issued a joint press release stating their intention to become life partners. In the proposed $13 billion deal -- which they'd like to go down by the end of the year but which still must pass rather daunting regulatory scrutiny and opposition from such heavyweights as the National Association of Broadcasters -- investors would get 4.6 shares of Sirius stock for each share of XM, with current Sirius CEO Mel Karmazin and XM Chairman Gary Parsons retaining those roles, respectively, in the combined entity (whose name has yet to be decided). As you might imagine, the companies are already trying to spin this as a big win for everyone from Martha Stewart on down, arguing that consumers will end up benefiting from more programming choices and better hardware, manufacturers and retailers will see increased sales, and of course shareholders would gain value through the economies of scale and elimination of redundancies realized from a merger. The new pals also took an opportunity to sneak in a mention about the growing number of choices consumers have for receiving audio content, from old school AM/FM to internet radio to the the still-nascent technologies of cellphone streaming and HD radio, clearly hoping to sway public opinion on that whole anti-trust thing. Still, keep in mind that the FCC is gonna be taking a long, hard look at this one -- in fact, current regulations would need to be changed in order for the merger to gain approval -- so don't get your celebratin' started just yet.

February 19, 2007

To: SIRIUS Subscribers

Today is a very exciting day for SIRIUS customers. As you may have heard,
SIRIUS Satellite Radio and XM Satellite Radio are merging to form the nation's
premier audio entertainment provider.

This combination of our two offerings will benefit you - our loyal listeners.
As a single company, we'll provide superior programming to you every day with
the best of both SIRIUS and XM. Currently, XM and SIRIUS broadcast a wide range
of commercial-free music channels, exclusive sports coverage, news, talk, and
entertainment programming. Howard Stern. Oprah and Friends. The NFL. MLB.
NBA. ESPN. CNBC. Fox News. Additionally, the combined company will be able
to improve existing services such as real-time traffic information and rear-seat
video as well as introduce new ones.

After shareholder and regulatory approvals, we anticipate that the combination
will be finalized by the end of 2007. Until then, both companies will continue
to operate independently. We will continue to provide you with the
uninterrupted service - as well as the outstanding customer support - that you
have come to expect and enjoy from SIRIUS. We do not anticipate any changes in
your service during the merger process, however, please call our customer care
team on 1- 888-539-7474 should you have any questions.

We look forward to the many benefits this combination will offer and continuing
to make your listening experience an enjoyable one - offering more of the Very
Best Radio on Radio.

Stay tuned,

Mel Karmazin, CEO

I wonder if we'll have to get a new receiver and if it will be compatible with the same hardware out there (including RR). Here's the email I got today: