US platform DirecTV axes deal to buy Dish due to bondholder opposition
The proposed merger of US-based pay TV platform DirecTV and satellite TV service Dish – which would have created the biggest US payTV operator – has now been abandoned.
Bill Morrow
Over the weekend, DirecTV said it had called off a deal with Charlie Ergen’s EchoStar to acquire video distribution company Dish DBS, which includes Dish TV and Sling TV, due to opposition from bondholders to debt exchange offer terms.
The transaction would have seen DirecTV acquire Dish from owner EchoStar Corp for a nominal US$1 consideration but also assume substantial Dish debts totalling around $9.75 billion. The deal was contingent upon Dish’s bondholders agreeing to accept the principal amount of the company’s debt of at least $1.568 billion.
However, a group of bondholders rejected the terms and any merger now appears to be dead in the water.
Bill Morrow, CEO, DirecTV, said: “While we believed a combination of DirecTV and Dish would have benefitted all stakeholders, we have terminated the transaction because the proposed exchange terms were necessary to protect DirecTV’s balance sheet and our operational flexibility.
“DirecTV will advance our mission to aggregate, curate, and distribute content tailored to customers’ interests by pursuing innovative products and providing customers with additional choice, flexibility, and control. We are well positioned for the future with a strong balance sheet and support from our long-term partner TPG.”
The termination of the Dish acquisition does not affect TPG’s acquisition of the remaining 70% stake in DirecTV from AT&T, which is expected to close in the second half of 2025.
Rival companies DirecTV and Dish had previously flirted with amalgamating over many years, with Morrow recently describing a deal as “not a matter of if, only when.”
It was estimated that DirectTV and EchoStar could have saved around $1bn a year by combining their costs. A unified service aimed to offer bundled content package deals to around 19 million potential viewers – roughly one-quarter of the total US market.
A previous merger attempt in 2002 was blocked by US regulators.
