DirecTV Calls Off Dish Acquisition Amid Lender Pushback
Deal News | Nov 22, 2024 | EIN
DirecTV has called off its acquisition of satellite TV rival Dish, owned by Charlie Ergen's EchoStar, after lenders revolted over terms. The deal, announced in September, intended to create a major pay-TV distributor with 20 million subscribers. DirecTV was to assume approximately $9.75 billion in Dish's debt as part of the acquisition. Additionally, Dish bondholders were required to exchange their debt for new debt at a discounted rate, accepting a $1.57 billion debt haircut. However, Dish bondholders rejected this proposal. DirecTV's CEO, Bill Morrow, stated that the exchange terms were essential for protecting their balance sheet and operational flexibility. The termination of the transaction, effective Friday, is a setback for EchoStar, which is burdened with over $20 billion in debt. This attempt marked the second failure between the two companies to merge, the first being blocked by regulators in 2002 over competition concerns.
Sectors
- Telecommunications
- Media
Geography
- United States – The companies involved, DirecTV and Dish, operate primarily in the United States market, making this geography relevant for the article.
Industry
- Telecommunications – The article involves major companies in the satellite and pay-TV sector, a key area within the telecommunications industry.
- Media – The topic pertains to pay-TV distribution, content aggregation, and the challenges due to the increasing popularity of streaming platforms, which falls under the media industry.
Financials
- 9.75 billion – The debt that DirecTV was supposed to assume from Dish as part of the acquisition deal.
- 1.57 billion – The haircut or debt reduction Dish bondholders would have faced under the new, merged company.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| DirecTV | Bidding Company | Company | DirecTV is a major satellite TV company seeking to acquire Dish to form a leading pay-TV distributor. |
| EchoStar | Selling Company | Company | EchoStar, co-founded by Charlie Ergen, owns Dish Network and is heavily burdened with debt. |
| Dish Network | Target Company | Company | Dish Network, under EchoStar, was the target for acquisition by DirecTV to bolster its subscriber base. |
| Bill Morrow | CEO of DirecTV | Person | Bill Morrow is the CEO of DirecTV, spearheading the acquisition strategy and decision to terminate the deal. |
| Charlie Ergen | Co-founder of EchoStar | Person | Charlie Ergen is a telecommunications entrepreneur involved in the foundation of EchoStar and Dish Network. |