Today, SiriusXM and Liberty Media Corporation announced a deal that will merge SIRIUS XM with Liberty Media’s Liberty SiriusXM tracking stock group. This deal will simplify the SiriusXM ownership as Liberty Media’s Liberty SiriusXM tracking stock group already owned part of SiriusXM.
With this deal, SiriusXM will continue under the SiriusXM brand. This comes as SiriusXM recently announced a newly rebuilt app and satellite service.
“We have reached an important milestone in Liberty’s ownership of SiriusXM. This combination will create value for all stockholders by eliminating the tracking stock structure, enhancing liquidity and allowing former LSXM stockholders to participate directly in the ongoing performance of SiriusXM,” said Greg Maffei, Liberty President & CEO. “SiriusXM commands the largest paid share-of-ear in the car and has proven itself as an incredibly successful and profitable business. We are confident SiriusXM will continue to create value by building on its resilient business model to execute its strategic initiatives. We look forward to remaining meaningfully involved in the business and significant stockholders.”
“We are pleased that the Special Committee of our Board of Directors has reached this agreement with Liberty Media, which will allow SiriusXM to enter its next phase of value creation,” said Jennifer Witz, Chief Executive Officer of SiriusXM. “In a highly fragmented audio entertainment industry, SiriusXM has differentiated itself as the leading audio entertainment provider by creating an experience centered on our high-quality, premium, human curated radio that is more relevant than ever. In doing so, we have built a profitable business that is poised for continued success. With our strong foundation and as we roll out our next generation platform, we are transforming SiriusXM to drive long-term growth and stockholder value creation.”
This deal will result in a New SiriusXM being an independent public company, with no majority stockholder, a single class of shares and a board comprising a majority of independent directors. According to the deal this move will give the company “greater strategic flexibility and independence.” This will also help SiriusXM have additional cash on hand.
Here is how SiriusXM hopes to grow with this deal:
- Leaning into the Company’s live, human curated audio experiences: SiriusXM is an innovative content company and leader in providing a differentiated blend of live, human curated and artist-hosted radio, exclusive talk programming, podcasts and news, sports and more.
- Leading subscription business positioned for the future: SiriusXM has more than 155 million SiriusXM-enabled vehicles on the road, 34 million paid subscribers with near record low churn and continues to roll out its 360L platform and expand its electric vehicle footprint. In addition, with the launch of its next generation platform, the Company is focused on delivering a unified, personalized experience in- and out-of-vehicle by creating seamless listening experiences, with greater personalization and content discovery for consumers anywhere they choose to listen.
- Tapping into new audiences to grow with its next generation platform: SiriusXM is doubling-down on its differentiated content, while enhancing its value proposition with a modernized brand, new app experience, and an attractive new price point for streaming-only subscribers. Through its new next generation platform, SiriusXM is poised to retain its loyal core audience of listeners and capture demand from new growth audiences that are younger, more diverse and willing to pay for multiple services.
- Capturing opportunities in ad-based platforms: SiriusXM commands a significant audience, reaching over 150 million monthly listeners across SiriusXM, Pandora and its broader podcast and off-platform ad network. The Company generates over $1.8 billion in advertising revenue and continues to invest in advertising capabilities, creating a unique value proposition for advertisers to reach its scaled and diverse listener base.
- Consistently delivering strong results and capital returns: SiriusXM continues to generate high EBITDA margins and steady free cash flow that support the Company’s ability to invest in long-term growth and rapidly de-lever, while also returning capital to stockholders. The Company does not expect any change to its existing dividend policy while de-emphasizing repurchases until it reaches its long standing leverage target of low-to-mid 3x adjusted EBITDA. Over the last three years, SiriusXM has returned approximately $4.4 billion to stockholders through a combination of dividends, special dividends and share repurchases. The Company has no bond maturities until 2026 and expects to end 2023 with approximately $2 billion of available liquidity, plus committed financing of another $1.1 billion in support of this transaction.