DirecTV has agreed to purchase rival Dish Network for just $1, assuming its significant debt.
The deal will involve DirecTV taking over Dish’s billions of dollars in debt in exchange for acquiring the company for a nominal fee.
The big picture: The acquisition of Dish Network by DirecTV marks the end of long-running discussions about a potential merger between the two satellite TV companies.
- Both DirecTV and Dish have faced challenges in retaining subscribers in the current streaming era, where platforms like Netflix and Hulu have attracted customers with lower costs and on-demand content.
- To finalize the deal, DirecTV will pay EchoStar (Dish’s owner) $1 and will acquire Dish’s debt, while private equity firm TPG will acquire AT&T’s remaining 70% stake in DirecTV.
- The agreement is contingent on Dish bondholders agreeing to a net debt amount less than $1.56 billion, which the company is working to secure.
- DirecTV and Dish will receive a $10 billion loan from TPG and DirecTV to help Dish pay off its upcoming $2 billion debt maturity.
What we’re watching: The newly merged entity will continue to support the Dish brand, with no immediate plans to change the existing Dish or Sling TV brands.
- Upon completion of the merger, the combined service would have around 20 million subscribers, with DirecTV accounting for over 11 million of that number.
