Satellite radio firm SiriusXM said Friday it has agreed with Pandora to make a $480 million strategic cash investment in the personalized online radio service.
The cash purchase of Pandora stock will give the satellite radio company a 19 percent stake in Pandora, which has been on the block for some time. The deal includes a provision to curb SiriusXM’s ability to take over the entire company, at least for now, by limiting SiriusXM from acquiring more than 31.5 percent of Pandora without the approval of the Pandora board.
The deal announced on Friday includes an agreement for the two companies to work together on internet streaming on mobile devices and in cars. For Sirius XM—part of the constellation of companies controlled by Liberty Media—the new stake in Pandora will give it an important toehold in a number of businesses, including ad-supported radio and particularly internet radio.
The news sent Pandora shares up 6.4 percent to nearly $9.00. SiriusXM was basically flat.