Hughes, EchoStar terminate merger pact (DirecTV, Dish Network)

Associated Press | December 10, 2002

[HAL9000]

DETROIT - Hughes Electronics Corp. of El Segundo, Calif., and EchoStar Communications Corp. terminated their proposed merger of the nation's two biggest satellite television operations, the companies announced Tuesday.

The government had taken steps to block the deal, and the companies said they called it off because it couldn't be completed within the time allowed.

Hughes owns DirecTV, while EchoStar runs the Dish Network. The planned merger would have created a single powerhouse satellite TV service with 18 million subscribers.

As part of the termination settlement, EchoStar has paid Hughes $600 million in cash, and Hughes, a General Motors Corp. subsidiary, will retain its 81 percent ownership position in PanAmSat, a satellite operator.

The merger was delayed after the Department of Justice, 23 states, the District of Columbia and Puerto Rico took action to block it, and the Federal Communications Commission sent the merger application to a hearing.

"We continue to believe that the proposed merger would have been a victory for consumers nationwide, and for our shareholders. We worked hard on it to get the required regulatory approval and are disappointed that we were not able to complete the merger," Hughes president and chief executive Jack A. Shaw said in a statement.

EchoStar chairman and chief executive Charles Ergen said the company is disappointed.

GM spokeswoman Toni Simonetti said the merger would have good for consumers and stockholders.

Last month, EchoStar filed a revised proposal to buy DirecTV with federal regulators. In October, the FCC and Justice Department said the union would create a monopoly in rural areas and reduce choice in almost all other areas.

Industry analysts had doubted any plan will change the minds of regulators.

EchoStar will take an approximate $700 million write off in the fourth quarter for the merger breakup fee and other related merger expenses.

[NormsRevenge]

Bummer..

[gcruse]

Ford should be busted up. They have a monopoly on making Ford trucks. Has the FCC gone insane? TV can make it's way into homes over the air and through cable. Having one company own DSB is not a trust nor is it a monopoly. Though I suppose a country that bases its laws on being 'for the children' can be expected to deny mergers based on a few rural areas. And we bash Canada for being socialist.

[JDoutrider]

There goes my hopes that a "Starband" high speed sattelite will become a reality soon. Dishnet quit the service and told me they were hoping to come out with the service after the merger...

Do you know who took this service over from Dishnet?

[HAL9000]

Despite Ergen's earlier remarks, EchoStar is proceeding with their plans to launch a Ka-band broadband satellite. The FCC International Bureau issued an order last month authorizing EchoStar to proceed with the project. Here is a PDF document of the order.

If EchoStar had failed to demonstrate their intention to launch the service, the FCC would have revoked their license for the new satellite's orbital slot.

Meanwhile, StarBand is available for Dish customers, and DirecTV users can get DirecWay. Liberty Media may invest in WildBlue to help them get going. Unfortunately, Teledesic appears to be dead.

[JDoutrider]

Thanks for the heads up!

[packrat35]

I'm glad the merger did NOT go through. Competition breeds better service and prices in the marketplace.

Don't believe me: Ask most people who have only one cable company to choose from.