UPDATE 1-Sirius, XM to offer reduced price plan after deal
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NEW YORK, March 21 (Reuters) - Sirius Satellite Radio (SIRI.O: Quote, Profile, Research) and XM Satellite Radio (XMSR.O: Quote, Profile, Research) expect to offer a lower-priced package consisting of fewer channels after the companies combine, Sirius said on Wednesday.
The combined company will provide programming choices on a "more a la carte basis," including tiers of service both higher and lower than the $12.95 per month each company currently charges, Sirius said.
"After the merger, customers may elect to receive fewer channels at a monthly price lower than $12.95; substantially similar programming at the existing $12.95 price; or more channels ... at a modest premium to the cost of one service, and considerably less than the cost of subscribing to both services," Sirius said in a federal filing.
The price of the services, which offer music, talk, news and sports channels, has been a much argued topic during U.S. regulatory hearings over Sirius' proposed acquisition of XM.
Sen. Herb Kohl, chairman of the U.S. Senate's antitrust subcommittee, on Tuesday expressed doubts about whether regulators should approve the deal. The Wisconsin Democrat said the combination may be "a fabulous monopoly" for Sirius and XM, and "a real bad deal for consumers."
Responding to Kohl's comments, Sirius Chief Executive Mel Karmazin promised lawmakers that the company would not raise prices. Kohl and Karmazin made their comments during a hearing before the Senate antitrust subcommittee.
The proposed deal values XM at $4.1 billion, based on Tuesday's closing price for Sirius of $3.31 per share on Nasdaq and XM's 268.5 million outstanding shares.
Shares of XM and Sirius were fractionally higher in early Nasdaq trade.
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