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Sirius, XM shareholders approve merger

The storied merger proceedings between Sirius Satellite Radio (NASDAQ: SIRI) and its hoped-for partner, XM Satellite Radio (NASDAQ: XMSR), took another step on Tuesday, albeit one that was widely expected. Shareholders of both companies gave the merger their collective blessing by a healthy majority.

The sizable hurdles of regulatory approval on the part of the Justice Department and the Federal Communications Commission (FCC) remain. Those opposed to the collaboration say the deal would create a monopoly in the satellite radio industry and point to the failed merger attempt between EchoStar Communications (NASDAQ: DISH), parent of the DISH Network, and DirecTV.

People in favor of the merger argue that satellite radio is a luxury, not a necessity (of course, neither is cable television). What's more, as I've pointed out before, satellite radio as an entity still faces plenty of competitive pressures. A consumer at home or in the car is faced with plenty of entertainment options for his listening pleasure, from regular terrestrial radio, to Internet radio broadcasts, to MP3 players, to music offered over cable television airwaves.

The merger was originally announced on February 19, making today the 269th day of this arduous process. In the 8 months and 27 days this has taken, countless babies have been conceived and delivered, Don Imus was fired and rehired, and Rupert Murdoch's News Corp. (NYSE: NWS) made plans to swallow Dow Jones. Sirius Chairman Mel Karmazin reiterated that the merger should close by the end of the year. One can hope.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

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Last updated: July 06, 2008: 05:48 PM

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