Hughes to Keep PanAmSat Interest
EchoStar Communications Corporation and General
Motors and its subsidiary, Hughes Electronics Corporation, today announced the companies have reached a settlement to
terminate the proposed merger of Hughes and EchoStar, effective
immediately.
Under terms of the settlement, EchoStar has paid to Hughes $600
million in cash, and Hughes will retain its 81 percent ownership
position in PanAmSat .
The companies reached this settlement because the proposed merger
could not be completed within the time allowed by the merger
agreement. This was due to action taken by the Department of Justice,
23 states, the District of Columbia and Puerto Rico to block the
merger as well as the Federal Communications Commission’s decision to
send the merger application to a hearing.
“We are appreciative of all the support we received and the
opportunity to present the merger proposal to regulators. Obviously,
we are disappointed in the final outcome. However, EchoStar will
continue to seek alternative, innovative ways to provide competition
to the rapidly consolidating cable industry and to provide more
choices for all consumers,” said EchoStar Chairman and Chief Executive
Officer Charles Ergen.
“We continue to believe that the proposed merger would have been a
victory for consumers nationwide, and for our shareholders. We worked
hard on it to get the required regulatory approval and are
disappointed that we were not able to complete the merger,” said
Hughes President and Chief Executive Officer Jack A. Shaw. “However,
since the merger couldn’t be completed, we concluded that this
settlement is the best alternative for Hughes and places us in the
best position to move ahead with our business.”
As a result of the merger termination, EchoStar will take an
approximate $700 million write off in the fourth quarter for the
merger breakup fee and other related merger expenses.
EchoStar Communications Corporation and its DISH Network satellite
TV system provide over 500 channels of digital video and CD-quality
audio programming as well as advanced satellite TV receiver hardware
and installation nationwide. EchoStar is included in the Nasdaq-100
Index (NDX) which contains the largest non-financial companies on the
Nasdaq Stock Market. Visit EchoStar’s Investor Relations website at
www.echostar.com. DISH Network currently serves 8 million customers in
the United States. DISH Network is located on the Internet at
www.dishnetwork.com.
HUGHES, a world-leading provider of digital television
entertainment, broadband services, satellite-based private business
networks, and global video and data broadcasting, is a unit of General
Motors Corporation. The earnings of HUGHES are used to calculate the
earnings attributable to the General Motors Class H common stock.
General Motors , the world’s largest vehicle
manufacturer, designs, builds and markets cars and trucks worldwide,
and has been the global automotive sales leader since 1931. GM employs
about 355,000 people around the world. More GM information can be
found at www.gm.com.
