DirecTV Abandons EchoStar Acquisition

(Reuters) – Satellite TV provider DirecTV announced on Tuesday it will abandon its planned acquisition of EchoStar's satellite television business, including Dish TV, by Nov. 22 unless bondholders agree to a debt exchange.

A group of Dish bondholders rejected DirecTV's proposed debt-exchange offer, which required a $1.5 billion write-down. DirecTV stated, "A successful exchange was a condition for acquiring the Dish video business." Therefore, without action from the bondholders, the acquisition will end by midnight on Nov. 22.

EchoStar and Dish did not respond to requests for comment.

Initially announced in September, the proposed deal was viewed as a strategic consolidation in a declining pay-TV market, particularly as both companies face increasing competition from streaming services.

Through the deal, DirecTV intended to pay $1 for Dish DBS, which includes Dish and Sling TV, while taking on about $9.75 billion of Dish's debt. This exchange was aimed at extending the debt maturities.

The acquisition would have provided essential financial relief to EchoStar, co-founded by telecommunications entrepreneur Charlie Ergen, which is currently dealing with over $20 billion in debt.