I've been hearing Sirius-XM merger rumors for months. The US Airways-Delta merger is more likely to happen than a Sirius-XM merger. The biggest stumbling block to the merger is that when the FCC granted Sirius and XM
their SDARS licenses, one of the conditions that were put on both companies was that if they were to merge, they have to give up one of the licenses.
The DOJ is very hesitant to monopolies in satellite companies. A good example to use is the blocked merger between DirecTV and EchoStar (Owner of Dish Network). It was blocked because it would have led to a monopoly in the satellite TV
market (Echostar and DirecTV had over the years, bought up smaller companies in the industry).
The big question is "Who would buy the SDARS license that will have to be sold?" I wouldn't be surprised if News Corp. or CBS Corp. (or even a joint venture of the two companies) were to pick it up.