XM Canada may refuse a merger with Sirius Canada and go it alone in the satellite radio business if negotiations with its rival don’t go well in the wake of industry consolidation in the United States.
XM Canada chief executive officer Michael Moskowitz told the Globe and Mail the company is not averse to striking out on its own if it can’t agree on terms with Sirius, comments that may set the tone for tense negotiations in the coming months.
A forced merger of the two Canadian companies is believed to be the most likely scenario to unfold after regulators in the U.S. cleared the buyout of XM Satellite Radio Holdings Inc. by Sirius Satellite Radio Holdings Inc.
Canadian Satellite Holdings Inc. is the parent company of XM Canada, while Sirius Canada is a partnership of the CBC, Standard Radio and U.S.-based Sirius Satellite Radio.
Since both Canadian companies rely on their American affiliates for the bulk of their programming, which includes more than 100 channels of music and talk radio, XM Canada would have to expand its operations greatly to operate independently.
However, Moskowitz said the company is not averse to the idea if it finds the terms being offered in a potential merger with Sirius Canada unattractive.
“Nothing is off the table at this point in time,” Moskowitz said. “You can merge or you can go it alone, and we’ll evaluate those two options.”
In the wake of the U.S. deal, which had been scrutinized by regulators for more than a year, the two Canadian companies must now meet in the coming months to discuss how a merger would look. The talks are expected to be tense, since Sirius is likely to argue it deserves a bigger portion of any combined company since it has more subscribers.
A spokesman for Sirius Canada said the company’s CEO, Mark Redmond, would not comment on possible negotiations.