SIRIUS and XM to Combine in 13 Billion Merger of Equals

Washington and New York (February 20, 2007) PRNewswire-FirstCall--XM Satellite Radio and SIRIUS Satellite Radio announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.
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Washington and New York (February 20, 2007) PRNewswire-FirstCall--XM Satellite Radio and SIRIUS Satellite Radio announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.

Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently chief executive officer of SIRIUS, will become chief executive officer of the combined company and Gary Parsons, currently chairman of XM, will become chairman of the combined company. The new company's board of directors will consist of 12 directors, including Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the chief executive officer of XM, will continue in his current role until the anticipated close of the merger.

The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts' consensus estimates. Today the companies have approximately 14 million combined subscribers.

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending regulatory approval, the companies expect the transaction to be completed by the end of 2007.

SIRIUS Satellite Radio
www.sirius.com

XM Satellite Radio
www.xmradio.com