Satellite radio operator SiriusXM has announced plans to acquire music streaming service Pandora for $3.5bn (£2.66bn) in stock. The go-shop deal negotiated between the two gives Pandora a chance to evaluate any other offers it receives, but the boards of both companies have approved the planned deal.

Pandora will remain an independent service under the planned acquisition, with SiriusXM aiming to leverage both services to cross-promote each other. The company plans to create subscription packages that will bundle together SiriusXM radios with Pandoras ad-free premium subscription, as well as making it easier for consumers to listen to Pandora in cars, where SiriusXM is already widely available.

“Once the transaction has closed, the combined company will be the largest audio entertainment business in the world,” said a Pandora spokesperson. “That kind of scale means that well be even better able to provide our users an exceptional audio experience – no matter where they are, how theyre listening and what they want to listen to.

“Over time, well work together with SiriusXM to reimagine the future of audio – finding new ways to curate and launch unique product and content packages and deliver a seamless, engaging and always entertaining experience to the very people who made Pandora possible in the first place: all of you.”

Pandora currently has around 70m monthly active users, most of whom use the platforms free, ad-supported service, with only approximately 6m paying for its subscription version, which offers greater control over playlists. In contrast, SiriusXM only offers subscription-based listening, with completely ad-free channels.