Sirius XM acquisition news : Sirius XM Satellite Radio, world’s largest radio company headquartered in New York City is set to make strategic cash investment of $480 million for a 19% stake in California-based Pandora Internet Radio.

The move from Sirius XM is to make an impression in the ad-supported digital radio business.

Under the agreement terms, a SiriusXM subsidiary will acquire an undisclosed stake in Pandora Internet Radio for $480 million.

The American broadcasting company, SiriusXM bought $172.5 million worth stake following the signing of the definitive agreement. It has agreed to buy the remainder stake during a second closing.

Sirius XM has offered a price of $10.50 per share to the Pandora stakeholders.

SiriusXM CEO Jim Meyer on the SiriusXM investment in Pandora commented: “This strategic investment in Pandora represents a unique opportunity for SiriusXM to create value for its stockholders by investing in the leader in the ad-supported digital radio business, a space where SiriusXM does not play today.

“Pandora’s large user base and its ability to provide listeners with a personalized music experience are tremendous assets. With its strong technology and new product offerings, we believe there are exciting opportunities for Pandora to accelerate its growth and increase value for Pandora and SiriusXM stockholders.”

Pandora Internet Radio is among the leading providers of ad-supported digital radio in the US. It has a quarterly audience of around 100 million listeners in the US and is considered to be a strong player in the rapidly growing digital audio advertising market. Apart from the US, Pandora Internet Radio is available in Australia and New Zealand only.

SiriusXM acquisition of a significant stake in Pandora is likely to help the latter make selective investments and leverage on opportunities to consolidate its position further in the streaming radio business.

Pandora CEO and founder Tim Westergren on the SiriusXM acquisition of stake in his streaming radio business commented: “The investment from SiriusXM infuses resources to help Pandora continue to grow and innovate.

“With the strategic review behind us, and a strong balance sheet, we look forward to focusing on business execution and the optimization of our strategy.”

The second closing of the SiriusXM Pandora transaction is expected to close by the fourth quarter subject to customary closing conditions.

  Pandora Internet Radio, sirius xm investment, Sirius XM Satellite Radio, USA