Pandora is being sold for $3.5 billion

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SiriusXM announced earlier today (Sept. 24) they'll be buying the music streaming service, creating the largest audio entertainment company in the world.

Sirius XM sells subscriptions to hundreds of advertising-free radio channels to listeners in the U.S. and Canada, which are mostly delivered to auto stereos over satellite connections. Following the acquisition, both services will continue to operate, and "there will be no immediate change in listener offerings", SiriusXM wrote. Its combined revenue with Pandora will go up to $7 billion and the userbase will be at almost 100 million (36 million SiriusXM subscribers and over 70 million monthly Pandora users).

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Sirius XM already has a 15 per cent stake in Oakland, California-based Pandora, the companies said in a statement Monday.

SiriusXM hopes the deal will help it diversify its business by further extending its reach outside of auto radio subscriptions.

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Previous year also saw a different veteran of both the online radio and satellite radio industries pour a whopping $480 million into Pandora as a "strategic investment".

Pandora has agreed to be acquired by satellite company SiriusXM for $3.5 billion.

The ability to provide a subscription service that gives Pandora customers access to streaming music and satellite radio could help set it apart from its rivals and would likely draw in new customers.

The combination brings together SiriusXM's base of over 36 million subscribers across North America and 23 million+ annual trial listeners, and Pandora's 70 million monthly active users. SiriusXM and Pandora have competed for business. At its peak, Pandora was worth well over $US7 billion ($9.6 billion) - way more than that $US3.5 billion ($4.8 billion) acquisition price.

It's expected to close in the first quarter of 2019. SiriusXM's stock tumbled 7.5 percent.

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