Satellite Static: The XM-Sirius Merger

The announced merger of the two radio companies was greeted with optimism, but analysts caution that hurdles will hamper profitability

The initial response to the planned $13 billion merger of Sirius Satellite Radio and XM Satellite Radio Holdings was characterized by hurrahs and what-took-you-so-longs. Shares of both companies rallied on optimism that the transaction will result in lower costs and put the merged entity on a faster road to profitability. The new company "will be better positioned to compete effectively with the continually expanding array of entertainment alternatives," said XM Chairman Gary Parsons and XM Chief Executive Hugh Panero in a statement.

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