NEW YORK (AP) -- Shareholders approved a deal Tuesday to allow Sirius Satellite Radio Inc. to acquire its rival XM Satellite Radio Holdings Inc. for about $5 billion, but the largest hurdle has yet to come -- regulatory approval in Washington.
The firms say the deal will offer pricing and programming options. Critics say it will create a monopoly.
Shareholders of Sirius and XM had been widely expected to approve the deal, which would allow the companies to save costs on programming, acquiring subscribers and broadcasting. Shareholder advisory firms had already endorsed the deal.
More difficult will be getting the deal approved in Washington, where the Department of Justice and the Federal Communications Commission must both give their blessing. Several consumer groups have opposed the combination, saying it would create a monopoly that could hurt consumers.
Sirius said in a statement that more than 96 percent of the shareholder votes cast approved the acquisition, while XM said 99.8 percent of its shareholders were in favor. The companies said they still hoped to complete the deal by the end of the year.
The FCC had originally said the two satellite radio companies couldn't combine, but that rule can be changed. Sirius and XM have argued that satellite radio now faces more competition for listeners since the boom in digital listening devices like Apple Inc.'s iPod, Internet radio and cell phones that can play music.
Sirius and XM have said that a combined company would offer listeners more pricing options and greater choice and flexibility in the channel lineups they receive.
Sirius and XM now offer packages of music, talk, sports and other programming for a fixed rate of $12.95 a month. Many of the music channels are commercial-free, and unlike terrestrial radio, the signals can be received anywhere in the U.S.
If the deal is approved, the companies have said they would offer pricing plans ranging from $6.99 per month, for 50 channels offered by one service, up to $16.99 a month, where subscribers would keep their existing service plus choose channels offered by the other service. It isn't possible now to pick channels one by one.
The deal calls for XM shareholders to receive 4.6 shares of Sirius for every share they own, which values XM at $16.56 a share or about $5 billion, based on current share prices.
Sirius shares rose 22 cents or 6.5 percent to close at $3.63 Tuesday, while XM shares gained $1.33 or 9.7 percent to $15.06.
Copyright 2007 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.
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