The U.S. Justice Department on Monday approved the proposed $4.22 billion purchase of XM Satellite Radio (NASDAQ: XMSR) by Sirius Satellite Radio (NASDAQ: SIRI) after concluding a combined XM-Sirius would not harm consumers.
The deal still needs approval from the Federal Communications Commission, which is expected to follow the Justice Department’s lead.
The deal, announced in February 2007, would combine the only two providers of satellite radio in the United States.
“After a careful and thorough review of the proposed transaction, the [antitrust] division concluded the evidence does not demonstrate that the proposed merger of XM and Sirius is likely to substantially lessen competition, and that the transaction therefore is not likely to harm consumers,” the department said in a statement.
The long-awaited decision sent shares of XM and Sirius sharply higher. Although they later pared their best gains, XM stock was up nearly 14 percent to $13.59, while Sirius shares were up 6 percent to $3.08, both on NASDAQ.
The traditional radio industry, consumer groups and some U.S. lawmakers had criticized the deal as anticompetitive, but the satellite radio companies argued that they faced competition from traditional radio and personal audio players.
Officials from Sirius and XM were not immediately available for comment.