It was about two years ago that the talk of a merger first emerged. However it wasn't until Monday that Sirius and XM, the two major satellite radio providers on the market, announced that the two firms were indeed getting together.

The deal allows XM shareholders to receive 4.6 shares of Sirius stock for each share of XM owned by an investor. That arrangement will essentially mean shareholders would each own about 50% of the new, combined entity. Collectively the two companies offer an enterprise value of $13 billion with a total of $1.6 billion of long-term debt.

As part of the announcement, the Chief Executive Officer of the new company will be current Sirius Chief Executive Mel Karmazin. On the XM side, XM Chairman Gary Parsons is set to become the chairman of the merged entity.

The merger is also, of course, subject to shareholder approval. But the greatest challenge will likely be in the antitrust arena. Federal regulations could interfere if the new combined company is believed to produce an entity that might monopolize the relatively new satellite radio industry.

The initial merger talks began in January of 2005. At the heart of the joint venture for the two satellite entities is to move the competition for listeners to a combined effort against traditional radio formats.

However, one change in the new unit will be the movement to commercialized programming for some stations. At the time of the announcement, neither company offered any form of advertising on the airwaves.

Stocks for both companies responded positively on Friday when reports of the announcement leaked out.