By Don Reisinger
September 24, 2018

SiriusXM is hoping to build the “world’s largest audio entertainment company” with some help from Pandora.

The satellite radio company on Monday announced plans to acquire streaming music company Pandora for $3.5 billion. In a statement, SiriusXM said that the acquisition will be an all-stock transaction. Every Pandora shareholder will receive 1.44 shares of newly issued SiriusXM stock, putting a 13.8% premium on the company’s average price over the past 30 days. SiriusXM hopes to close the deal in the first quarter of 2019.

Pandora is widely viewed as a pioneer in the streaming-music industry and has more than 70 million monthly active users. Pandora offers both free and paid streaming and relies on an algorithm and user input to curate tracks. The company is working on using that same technology to understand what kinds of podcasts people are listening to and deliver to them alternatives that they would like based on their interests and taste.

Still, Pandora has found itself in a difficult position in the streaming market as alternatives like Apple Music (aapl) and Spotify (spot) continue to attract more members. And despite growing revenue, Pandora still loses tens of millions of dollars each quarter.

Acquiring Pandora (p) could help SiriusXM (siri) attract more digital users. The company has been trying to boost its digital user base with a new app and improving its online service, but it’s most successful in the car, where people often listen to its content, including music, Howard Stern, live sports, and more

SiriusXM has 36 million subscribers across North America and more than 23 million trial listeners, the company said in a statement. The combined company would count more than 100 million users, though not all of them are paid.

Looking ahead, SiriusXM said that it plans to continue to operate both services post-acquisition. The company believes it can create “cross-promotion opportunities” through the acquisition and build “unique audio packages” that can work across both services. Cross-promotion for artists is also on the docket.

There is, however, a chance this will never happen.

SiriusXM said in its statement on Monday that the deal includes a “go-shop” provision, which allows Pandora to solicit other bids. It’s unknown whether any other companies might bid for Pandora’s business.

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