DOJ Approves XM-Sirius Merger

The Justice Department’s Antitrust Division today announced it approved the take over of XM Satellite Radio by rival Sirius Satellite Radio, arguing that the merger would not create a monopoly in the audio entertainment industry.

Assistant Attorney General Thomas Barnett of the Antitrust Division said the investigation, which lasted more than a year, did not show that it would harm competition or consumers.

"The division reached this conclusion because the evidence did not show that the merger would enable the parties to profitably increase prices to satellite radio customers for several reasons," Barnett said in a statement.

Those factors, Barnett said, are a lack of competition between the two companies, the competitive alternatives to consumers, technological advances in the near future and efficiencies likely to flow from a transaction that could benefit users.

Sirius and XM have argued that they face strong competition from other audio market players, such as traditional radio, MP3s, iPods and wireless technologies. Groups such as the National Association of Broadcasters and the Consumer Federation of America and Common Sense have opposed the merger.

Last week, Federal Communications Commission Chairman Kevin Martin hinted that a decision was near on the merger because his staff was preparing itself for the results of a Justice Department investigation. The FCC will now review the deal.

"The process took longer than we typically take," Barnett said in a conference call with reporters. "This is a significant merger. There were issues we had to explore; a lot of information and data we had to collect not only from the parties...I didn’t want to issue a decision until we were confident."

Some heavy-duty names have been involved in the transaction, including Richard Wiley, a name partner of Wiley Rein. He was hired by Sirius and knows Martin — the FCC chairman — well. Martin is a former Wiley partner, having worked there before joining the Bush-Cheney election campaign in 2000.

Gary Epstein, a partner at Latham & Watkins’ D.C. office, joined Wiley to represent XM radio before the FCC.

On the antitrust end, Kevin Arquit, a partner based in Simpson Thacher & Bartlett’s New York office, has been the point man for Sirius.