SiriusXM's Acquisition of Pandora Approved in Europe, Where Neither Service Is Available

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SiriusXM’s announcement in September that it agreed to acquire Pandora in a deal worth some $3.5 billion in stock was big news for the digital audio world, with the conglomerate creating an industry-leading company with more than $7 billion in expected revenue.

Indeed, the combined company has a big footprint in the digital audio space, with Sirius commanding 36 million subscribers in North America and Pandora seeing 69 million average monthly users and 6.8 million paid subscribers to its Pandora Premium and Pandora Plus paid tiers in the United States, according to its latest public filing. But in yet another filing, posted yesterday (Nov. 19), the merger cleared another hurdle: last Friday (Nov. 16), the companies “received the requisite approvals under the competition laws of Germany and Austria.”

Curiously, however, neither SiriusXM nor Pandora operate on the continent of Europe at all, much less in Germany or Austria. And neither have plans to expand into those territories any time soon, sources tell Billboard. So why did the acquisition require approval under the competition laws of Germany and Austria?

The answer, sources say, has to do with Pandora’s acquisition of AdsWizz this past March. The digital audio advertising company, which Pandora purchased for $145 million in cash and stock in a deal that closed at the end of May, operates in 39 different countries, including several in Europe, Asia and Latin America. (Pandora, which previously operated in Australia and New Zealand, shut down its international operations last year.) Because of AdsWizz's presence in Europe, approval was required.

Already, AdsWizz has provided a boost for Pandora: in its third quarter financial filing, Pandora reported that its advertising revenue grew six percent year over year and ad RPM grew 11 percent year over year, both of which it attributed to the AdsWizz acquisition, in its first full quarter since that deal was finalized. And in October, the company announced that SoundCloud had signed a deal for Pandora, and thus AdsWizz, to sell its U.S. advertising.

Sirius, meanwhile, posted new company records in quarterly revenue ($1.5 billion) and quarterly adjusted EBIDTA ($589 million) for the third quarter, its first filing since announcing the planned acquisition of Pandora. The deal is expected to be finalized in Q1 2019.


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