XM/Sirius Merger Takes the Slow Track

Sirius SIRI shareholders approved the proposed $4.6 billion merger with satellite radio peer XM XMSR Tuesday, but some observers aren't anticipating a speedy decision from regulators.

Shares of both companies are up 21% in the past three months as investors' pessimism about the deal's chances of approval has lightened a bit.

"We look forward to completing the merger by the end of the year." Sirius CEO Mel Karmazin said in the vote announcement.

But Washington merger-watchers say the review will likely drag well into next year.

Regulators at the Federal Communications Commission and the Justice Department are reviewing the merger's potential impact on consumer choice and prices as well as the competitive issues of having a satellite radio monopoly.

Last week, both agencies requested additional material from the companies.

The highest hurdle for approval, say industry experts, is convincing antitrust officials that satellite radio faces formidable competition from conventional radio and new devices like Apple'sSIRI iPod.

Some deal fans had predicted the merger would gain approval as early as last month. But the new request for information seems to signal that there is a lot more work ahead, say observers.

"It's possible, not probable," says David Trout of M&A Researcher, referring to the likelihood of a successful regulatory review.