Siriusxm Canada Merger Case Study

On November 24, 2010, XM Canada and Sirius Canada Inc. agreed to a merger of companies. This merger, unlike that of the US, took a lot of time and required Canadian ownership so all previous negotiations had failed. The merger between the two companies formed SiriusXM Canada. The new company believed they would have a total subscriber base of 1.7 million and offer between 120-130 channels. As of today SiriusXM Canada has a subscriber base of 2.7 million people. XM Canada, which was a subsidiary to Canadian Satellite Radio Holdings Inc., was founded in 2002 and the ownerships was broken down in three different ways. John Bitove owned 58 percent, XM Radio owned 23 percent and the Toronto Stock Exchange owned the remaining 19 percent. Sirius Canada Inc. was established in 2004 and had two main investors, Canadian Broadcasting Corporation and Slaight Communications. In 2010 when the two companies merged the ownership was changed to better suit both companies. Canadian Satellite Radio Holdings Inc. owned 22.7 percent, SiriusXM owned 37.1 percent, CBC owned 15 percent, Slaight Communications owned 15 percent and the remaining 10.2 percent was owned by other investors. Prior to
When the merger occurred in 2010 the credit markets had tightened and the merger was at risk of not happening. Since the SiriusXM Canada merger required debt refinancing the issuance of the bonds could put the merger at jeopardy had there been any kind of delay. Redmond found that the liquidity of Canadian Satellite Radio Holdings Inc.shares could pose as a challenge to keep the small company afloat. With any type merger the overall outcome needs to have a positive outlook however in some cases this is not true. When the merger occurred the new company took a hit with the amount of overall debt however as we will see in the following pages the company had substantial growth and increase in