DirecTV has decided to walk away from its proposed merger with rival Dish Network, abandoning a tie-up that the two satellite-TV companies have attempted several times.
The Wall Street Journal reports DirecTV said that it informed Dish owner EchoStar it plans to scrap the deal at 11:59 p.m. ET Friday. The decision came after a rebuke from bondholders representing about $10.7 billion of debt in Dish and its DBS subsidiary. The broader tie-up depended on the creditors’ approval.
In September, DirecTV agreed to buy Dish from EchoStar for a nominal $1, plus the assumption of debt. The deal started to break apart last week after the companies failed to secure concessions from the key creditor group.
The merger’s failure poses another setback for the satellite companies and their respective owners, EchoStar and TPG. Executives had banked on saving both satellite operators’ flagging fortunes by pooling their resources to negotiate better rates for the TV programming they carry.
Private-equity firm TPG is still set to buy the remainder of DirecTV it doesn’t already own from AT&T but now faces the prospect of managing a debt-laden business without the benefit of future cost savings to lift its trajectory. TPG bought a 30% stake in DirecTV in 2021.
EchoStar Chairman Charlie Ergen had planned to shed Dish and its SlingTV service to focus on building a new wireless network operator. The company has said it plans to move forward with those plans regardless of the satellite merger’s outcome.
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