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ACCT 8110: Sirius XM - Merger

Final Presentation
by

Philip Eaker

on 26 October 2012

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Transcript of ACCT 8110: Sirius XM - Merger

Business XM Industry Changes Economic Changes Fierce Competition Reasons Transaction Born of Necessity TEAM 6 Strategic Financial By the numbers... $ billion "Merger of Equals" between Sirius and XM Radio would be the result. Company Shareholders $ - billion according to Wall Street, would be the value of the synergies achieved. $ million of these synergies should be attainable in 2009 with EBITDA of $300 million % . shares of the combined company will be owned by former XM shareholders, and the other 50% is owned former Sirius shareholders. of Sirius XM stock will be exchanged for every single share owned in XM. Enhanced content
Less channel duplication
Increased ability to compete Reduced operating costs
Increased cash flow
Greater shareholder value
Tax-Free Reorganization Section 368 (a) Recovery QUESTIONS?? Sirius XM Merger Sirius and XM:
Focused on Synergies Agencies:
Concerns of monopoly Investors:
Expecting greater ROI Stock dips to a low $0.12/share (2008)
Enormous Goodwill impairment
Looming bankruptcy, due to debt covenants Investor confidence injured
Automobile Industry still struggling
Competitors' popularity continues to grow Restructuring of debt successful
Synergies start to gain traction, profits show up in 2010
Continued subscriber growth
New automobile contracts The Purchase Sirius purchases 100% of XM's Assets and Liabilities with Sirius stock XM was not dissolved until January 12, 2011 Goodwill Impairment Sirius XM's stock declines significantly Immediately after the transaction the impairment was $4.75 billion
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