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New Conditions May Ease XM-Sirius Merger February 28, 2007

Posted by silviamocanu07 in Merger, Organizational Environment.

I found this interesting article on Businessweek (http://www.businessweek.com/technology/content/feb2007/tc20070228_918698.htm), which talks about the proposed merger between satellite radio players XM Radio (XMSR) and Sirius Satellite Radio (SIRI). In the piece, it is argued that thsi merger would not be in accordance with current government regulations. However, the two companies appear to be very confident in obtaining approval for the merge to go through. Their main claim is that the market has undergone substantial changes with the past decade, with new products such as iPods coming into the market. Given the changing environment and new competition, XMSR and SIRI are confident that regulators will grant them approval.

I believe that this relates directly to our class discussion on how the external environment affects organizations and how these must respond and adjust to these changes in order to remain competitive. In addition, it is not only the companies themselves that must adjust, but also regulations that no longer apply to the current market environment, in order to prevent unfair competition from emerging.

In this particular case, despite the fact that the two companies appear to be over 60% sure that the merger will be approved by the regulators, I believe that the process could be quite lentghy and its results uncertain. What do you think? Do you believ that government regulations are changing quickly enough to match emerging issues in the today’s dynamic market environment?



1. breichen - February 28, 2007

I don’t see the merger between XM and Sirius as a problem. I think that the issue here is that the merger would result in a monopoly of the satellite radio industry. I believe that both XM and Sirius have been in operation for several years, and they both entered the market at about the same time. I don’t know of any other satellite radio providers in the US, and there has been ample time for those who wished to enter the market to do so. Given these circumstances I don’t think the merger would be causing any problems.

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