Sirius-XM “Merger of Equals” Faces Regulatory Challenge

SIRIUS Satellite Radio and XM Satellite Radio announced plans for a “tax-free, all-stock merger of equals” in which XM shareholders will receive 4.6 shares of SIRIUS common stock per 1 share of XM stock owned.[1]  The planned merger has raised eyebrows as to whether the Federal Communications Commission (FCC) will approve the combination, particularly as under a current FCC rule SIRIUS and XM are prohibited from acquiring each other’s licenses.[2]  Based on this FCC rule, one has to wonder whether this is termed a “merger of equals,” despite what looks like an acquisition of XM by SIRIUS, to evade harsher FCC scrutiny.

I.  Terms of the Merger… of “Equals”?

Although termed a “merger of equals,” this transaction appears to fit the model of an acquisition of XM by SIRIUS.[3]  For one, XM shareholders will receive a certain amount of SIRIUS stock in exchange for their XM shares[4].  Second, XM shareholders

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China’s New M&A Regulations

I. Introduction

The first piece
in this series (A Warning to Foreign Companies Entering "Sensitive" U.S. Markets, in the September 6th, 2006 edition of this publication) discussed the attempts of foreign companies to enter "sensitive" areas of the US
economy, focusing on how the US government derailed the purchase of US
companies by foreign entities. [1] This
piece will discuss the Chinese government's new regulations covering
M&A transactions involving foreign investors purchases of Chinese
companies will affect the M&A market and possible motivations behind the new legislation.   

II. Analysis

On Aug. 8, 2006, the People's Republic of China ("PRC")'s  Ministry
of
Foreign Commerce ("MOC") issued new regulations ("Revised Provisions")
on M&A transactions in China. [2] These new regulations would
simultaneously ease and impede foreign acquisitions by allowing all
stock purchases, but also requiring government approval of most M&A
transactions involving offshore entities. [3] The Revised Provisions
went into effect

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Ford-GM Merger/Alliance Talks: Bigger is Not Necessarily Better

Automotive News recently reported that General Motors Corp. and Ford Motor Co. have discussed a possible merger or alliance.[1]  Neither company will comment on the talks [2], leading some followers to believe the reports are mere "speculation" and reflect "[n]ostalgia for the glory days of the American automobile industry."[3]  Nostalgia and speculation aside, the merger/alliance rumors are enough to incite the interests of industry followers and American car buyers as to the possible benefits of such a relationship.

A merger would combine "two of the world's most recognized brands."[4]  The combined company would account for "an astounding 41 percent of the U.S. auto market."[5]  An alliance could force innovative thought and encourage novel business decisions, as it seems to some that "[t]he old school way of doing things at Ford and GM isn't working."[6]  If nothing else, a merger would combine name recognition and product lines.  However, the merger process

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A Warning to Foreign Companies Entering “Sensitive” U.S. Markets

I. Introduction

While the
United States generally pushes for more open access for its investors
to foreign markets, the sight of foreign companies trying to invest in
"sensitive" areas of the U.S. economy has drawn a very different
reaction.  Two recent acquisition attempts illustrate this point:
CNOOC's, a Chinese oil and gas company, attempted acqusition of Unocal
and Dubai Ports World's attempted takeover of security for a number of
eastern and southern ports.

II. Analysis

On
June 23, 2005, CNOOC announced its attempted acquisition of Unocal, an
California-based independent oil and gas company. [1]  The Chinese
company's offer was $18.5 billion, which was roughly $2 billion more
than Chevron,the next highest bidder, offered, reflecting a premium of
about $1.5 billion over the value of Chevron's offer. [2]  CNOOC made
an all-cash offer of $67 per share compared to Chevron's lower combined
cash and stock offer of $61.26. [3]

Even before

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