US' Justice Dept approves €3.2bn XM-Sirius merger

The US Justice Department approved Sirius Satellite Radio's proposed €3.2 billion (US$5 billion) buy-out of rival XM Satellite Radio Holdings. It said the deal was unlikely to hurt competition or consumers, an Associated Press report said. The transaction was approved without conditions, despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry.

However, the merger still needs approval from the Federal Communications Commission, which prohibited such a merger when it first granted satellite radio operating licences in 1997, the report said.

The Justice Department explained its decision saying that the companies' combining won't hurt competition as they are not competing against each other today: customers must buy equipment that is exclusive to either XM or Sirius and consequently rarely switch providers.

The government also appeared to endorse a central argument the companies used in pushing for their merger, namely that ample competition is provided by other forms of audio entertainment, including HD radio, Internet-based radio stations and devices like Apple's iPod, the Associated Press report added.