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GM to sell Hughes Electronics to US firm EchoStar
New York (AFP) Oct 29, 2001 Automotive giant General Motors has agreed to sell it subsidiary Hughes Electronics, owner of satellite television company DirecTV, to US firm EchoStar for around 26 billion dollars, the companies announced in a statement late Sunday. GM's board of directors approved the deal after Australian-born media mogul Rupert Murdoch's News Corporation withdrew its bid Saturday. "This transaction provides significant benefits to Hughes, EchoStar, millions of present and future DIRECTV customers, and shareholders of both GM and EchoStar," said GM President and Chief Executive Officer Rick Wagoner, in a statement. "Weve said all along that we wanted to structure an agreement that would provide continued strong growth at Hughes and maximum value for ... shareholders. This transaction achieves these objectives," Wagoner said. In the same statement, EchoStar Chairman and Chief Executive Officer Charles Ergen said the new company be able "to compete more effectively against the dominant US cable and broadband providers - a critical factor given increasing consolidation in the cable industry." "This is an extremely compelling combination for GM, GMH and EchoStar shareholders," Ergen said. DirecTV is the primary satellite television provider in the United States, serving 10 million subscribers. EchoStar Communications, based in Littleton, Colorado, owns the second-largest US satellite TV operation with 6.7 million subscribers. DirecTV netted 425,000 new subscribers in the third quarter of this year alone, bringing in 1.3 billion dollars in revenue, a 18-percent increase from the same period last year, Hughes Electronics reported. As the United States lurched toward recession, Hughes' third-quarter revenues grew by a robust 24.6 percent, to 2.1 billion dollars. Australian-born media mogul Rupert Murdoch late Saturday withdrew his company's bid to purchase Hughes Electronics and its DirecTV subsidiary, after GM's board, which owns Hughes, failed to choose between Murdoch's News Corporation and EchoStar Communications. "We have no option but to withdraw immediately our fully negotiated and financed proposal," Murdoch said in a statement Saturday. Together with DirecTV, Hughes might have become a crown jewel in Murdoch's media empire, which includes the Fox Broadcasting Network, the all-news Fox News Channel -- a CNN competitor -- and the Hollywood studio Twentieth Century Fox. It would have allowed News Corporation to reinforce its position in the US media market, particularly in its promising and fast-growing digital communications segment. In early August, EchoStar, which owns six satellites enabling it to provide more than 500 channels of digital video, audio and data services, had launched a competing 32-billion-dollar offer, which included a stock swap and the assumption of nearly 1.9 billion dollars of Hughes debt. The proposed transaction also is subject to regulatory clearance by the Federal Communications Commission. Community Email This Article Comment On This Article Related Links SpaceDaily SpaceDaily SpaceDaily Search SpaceDaily Subscribe To SpaceDaily Express The latest information about the Commercial Satellite Industry
Stratos Steps Closer To Xantic Acquisition
Bethesda MD (SPX) Jan 5, 2006Stratos Global recently announced it had taken a step closer toward the completion of the acquisition of Xantic, having received positive advice from the Works' Council in the Netherlands, and executed a definitive agreement to purchase Xantic from KPN and Telstra Corporation. |
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