DirecTV cancels acquisition of rival Dish

MICHELLE CHAPMAN AP Business Writer

DirecTV is canceling its planned acquisition of rival Dish after the offer was rejected by that company’s bondholders.

The deal involved Dish’s bondholders agreeing to swap their debt for debt from the new company, a swap that would have collectively cost them about $1.6 billion.

DirecTV’s retreat this week could end the company’s years-long effort to acquire Dish and Sling after it announced an offer in September.

DirecTV sought to acquire Dish TV and Sling TV from its owner EchoStar in a debt swap deal that included a $1 payment plus the assumption of approximately $9.8 billion in debt. The deal was contingent on several factors, including regulatory approval and the write-off of Dish-related debt by bondholders.

“While we believed that the combination of DirecTV and Dish would benefit all parties involved, we terminated the transaction because the proposed exchange terms were necessary to protect DirecTV’s balance sheet and our operating flexibility,” DirecTV CEO Bill Morrow said in a statement.

The prospect of DirecTV and Dish merging had been rumored for a long time, and rumors of negotiations resumed a few years later. And the two companies nearly merged more than two decades ago, but the Federal Communications Commission blocked the deal, then valued at $18.5 billion, citing antitrust concerns.

Since then, the pay TV market has changed significantly. As more and more consumers connect to online streaming platforms, demand for more traditional satellite entertainment continues to decline.

DirecTV says it will continue to invest in next-generation streaming platforms and offer new packaging options while integrating live TV content with direct-to-consumer services.

AT&T acquired DirectTV for $48.5 billion back in 2015. But in 2021, after losing millions of customers, AT&T sold a 30% stake in the business to private equity firm TPG for $16.25 billion.

The termination of the deal will not affect 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.

Originally published: November 22, 2024 8:55 am CST