U.S. radio operators Sirius Satellite Radio and XM Satellite Radio Holdings have agreed to merge, the companies said Monday.

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The deal, which would create a single satellite radio operator with more than 12 million subscribers, would save the companies nearly $7 billion a year, The New York Post reported.

The agreement is being structured as a merger of equals, with both companies getting the same share of the new company, the companies said.

The new company would keep offices in New York, where Sirius is based, and Washington, XM's headquarters.

Sirius has a market capitalization of $5.2 billion. XM is valued at about $3.8 billion.

Sirius Chief Executive Officer Mel Karmazin will become the new company's CEO with XM Chairman Gary Parsons retaining that title, the companies said. It is unclear what role XM CEO Hugh Panero would play.

Gaining regulatory approval "could take up to 15 months," a Bear Stearns analyst wrote Friday.

Federal Communications Commissioner Kevin Martin has said he has regulatory concerns about combining the two services, which feature rival sports, music and talk-radio programming.