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The
deal was reliant on Dish bond holders agreeing to trade in the
debt they held for debt in the new company, a swap that would
have cost them about $1.6 billion, collectively.
The retreat by DirecTV this week may end a years-long effort by
the company to acquire both Dish and Sling after it announced
the bid in September.
DirecTV was looking to acquire Dish TV and Sling TV from its
owner EchoStar in a debt exchange transaction that included a
payment of $1, plus the assumption of approximately $9.8 billion
in debt. The deal was contingent on several factors, including
regulatory approvals and bondholders writing off debt related to
Dish.
“While we believed a combination of DirecTV and Dish would have
benefited all stakeholders, we have terminated the transaction
because the proposed exchange terms were necessary to protect
DirecTV’s balance sheet and our operational flexibility,”
DirecTV CEO Bill Morrow said in a statement.
The prospect of a DirecTV-Dish combo has long been rumored, and
reported talks resurfaced over the years. And the two almost
merged more than two decades ago — but the Federal
Communications Commission blocked the deal valued at the time at
$18.5 billion deal, citing antitrust concerns.
The pay-for-TV market has shifted significantly since. As more
and more consumers tune into online streaming platforms, demand
for more traditional satellite entertainment continues to
shrink.
DirecTV says that it will continue to invest in next-generation
streaming platforms and offer new packaging options while
integrating content from live TV alongside direct-to-consumer
services.
AT&T purchased DirectTV for $48.5 billion back in 2015. But in
2021, following the loss of millions of customers, AT&T sold a
30% stake of the business to private equity firm TPG for $16.25
billion.
The termination of the deal doesn’t impact TPG’s acquisition of
the remaining 70% stake in DirecTV from AT&T for about $7.6
billion, which is expected to close next year.
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