Sirius XM Holdings has agreed to acquire Pandora Media in a US$3.5-billion deal, helping the satellite-radio company controlled by billionaire John Malone expand into online music.

The all-stock transaction values Pandora at $10.14/share, about 12% more than the company’s closing price on Friday. Sirius XM already has a 15% stake in Oakland, California-based Pandora, the companies said in a statement on Monday.

The combination will help Sirius XM expand beyond an audience that largely listens to the satellite radio company’s programmes while driving. Sirius XM acquired a stake in Pandora last year for $480-million, giving the online radio company a lifeline after upstarts such as Spotify Technology began luring away streaming music subscribers. Pandora has introduced its own on-demand music service and brought in former Sling TV CEO Roger Lynch a year ago to work on a turnaround.

Pandora jumped 8.6% to $9.87 at 7.49am in New York. That’s below its 2018 closing high of $9.97 earlier this month. Sirius XM fell 4.4% to $6.67.

Pandora had surged 89% this year through to Friday after setbacks in 2017 sank the stock. The company recovered this year after showing it could attract new paying subscribers and fend off music streaming competitors ranging from Spotify to Amazon.com. Pandora had about six million subscribers at the end of the second quarter.