DirecTV Ends Merger Agreement with Dish TV Parent Company EchoStar
DirecTV has called off its planned acquisition of EchoStar’s satellite television business, which includes rival Dish TV, halting what would have been a major consolidation in the U.S. pay-TV industry.
The merger, announced in September, aimed to create a combined subscriber base of 20 million, positioning the new entity as one of the largest pay-TV providers in the country. However, the deal’s success hinged on Dish bondholders agreeing to exchange their existing debt for discounted debt in the merged company, requiring a $1.57 billion “haircut.”
As part of the agreement, DirecTV was to acquire EchoStar’s Dish DBS division—comprising Dish TV and streaming service Sling TV—for $1 while assuming approximately $9.75 billion in Dish’s debt.
In a statement on Thursday, DirecTV CEO Bill Morrow explained the rationale behind terminating the deal, saying, “The proposed exchange terms were necessary to protect DirecTV’s balance sheet and maintain our operational flexibility.” The termination takes effect on Friday.
EchoStar, co-founded by telecom mogul Charlie Ergen, is grappling with over $20 billion in debt. The merger was seen as a potential financial lifeline for the company while offering DirecTV a stronger foothold in a shrinking pay-TV market.
Neither EchoStar nor Dish has issued an immediate comment regarding the deal’s collapse.
While DirecTV and Dish have engaged in sporadic merger discussions over the years, this latest attempt underscores the challenges facing traditional satellite television providers as they navigate a rapidly evolving media landscape.
