DirecTV terminated its deal to acquire EchoStar's video distribution business DISH DBS after disagreement over debt exchange terms.
The satellite TV provider revealed that it has already notified EchoStar of its decision to end the Equity Purchase Agreement (EPA) after failure to agree to the proposed exchange debt offer terms by EchoStar.
"While we believed a combination of DIRECTV and DISH would have benefitted all stakeholders, we have terminated the transaction because the proposed Exchange Terms were necessary to protect DIRECTV's balance sheet and our operational flexibility," Bill Morrow, CEO of DIRECTV noted in a press release.
For the deal to be completed, Dish bondholders had to agree to exchange their debt for new debt in the merged entity at a discounted rate, reducing the debt by about $1.57 billion.
"DIRECTV will advance our mission to aggregate, curate, and distribute content tailored to customers' interests by pursuing innovative products and providing customers with additional choice, flexibility, and control," Morrow added.
The company noted that the termination of the DISH acquisition will not affect TPG's acquisition of the remaining 70% shares in DirecTV from AT&T. It is a deal that the company expects to close in the second half of 2025.
According to Reuters, the terminated deal would have created one of the country's "largest pay TV distributors," which would have a staggering 20 million subscribers combined.
Just last week, it was reported by Reuters that a group representative of about 85% of the total bondholders rejected the proposal.
The termination of the deal, which was originally announced in September, would take effect on Friday. The deal was supposed to have been a strategic consolidation of a business in a market that was already diminishing in terms of customers.
It would have given EchoStar an influx of resources, which at the moment is facing a challenging debt of more than $20 billion.
DIRECTV also stated that it will continue to invest in next-generation streaming platforms and revolutionize the industry through new packaging options while integrating content from live TV alongside direct-to-consumer services.
