WASHINGTON Sirius Satellite Radio's $5 billion buyout of rival XM Satellite Radio got the Justice Department's green light Monday as government lawyers found that the combined company competes against a broad universe of electronic entertainment.
Justice Department officials brushed aside arguments by consumer groups and traditional radio broadcasters who mounted an intense campaign to block the deal.
In what is surely to be a controversial decision, the department ruled that the two companies didn't just compete against each other but with everything from land-based radio to the Internet.
"The likely evolution of technology in the future, including the expected introduction in the next several years of mobile broadband Internet devices, made it even more unlikely that the transaction would harm consumers in the longer term," the Justice Department said. "Accordingly, the division has closed its investigation of the proposed merger."
The merger also must be approved by the FCC, which must determine whether it is in the public interest. Usually, approval by the Justice Department is seconded by the FCC.
XM shares rose $1.97, or 16.5 percent, to $13.90 in afternoon trading after the government's announcement, and Sirius shares rose 28 cents, or nearly 10 percent, to $3.18.