In a move to revamp the pay TV landscape, DirecTV has agreed to acquire EchoStar’s satellite television business, including Dish TV, in a deal that will create one of the largest pay TV distributors in the US. The combined entity will boast a massive 20 million subscribers, giving it significant bargaining power to negotiate better programming deals.
The acquisition comes at a critical time for the industry, as traditional satellite TV services face intense competition from streaming giants like Netflix and Amazon Prime Video. DirecTV CEO Bill Morrow believes the merged company will be able to offer customers a more personalized viewing experience, allowing them to easily discover and manage their favorite shows across various platforms.
Under the terms of the deal, DirecTV will pay $1 to acquire Dish DBS, which includes Dish and Sling TV, and assume approximately $9.75 billion of Dish’s debt. To facilitate the transaction, Dish will launch an exchange offer to extend the maturities of its debt, which will require debtholders to accept a $1.57 billion haircut.
The deal provides a much-needed lifeline to EchoStar, which has been struggling under a debt burden of over $20 billion. The company will receive $2.5 billion in financing from TPG’s credit unit Angelo Gordon and DirecTV to help pay off its $2 billion bond due in November.
The acquisition also marks a significant exit for AT&T, which is selling its 70% stake in DirecTV to TPG for $7.6 billion. The deal is expected to close in the fourth quarter of 2025, pending regulatory approvals.
Industry experts believe the merger will face scrutiny from regulators, but DirecTV CEO Bill Morrow is confident that the combined entity will be able to compete effectively in a rapidly changing media landscape. With the deal, Dish will be able to focus on building out its 5G wireless network, while DirecTV expects to generate cost synergies of at least $1 billion annually.
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