TPG buys AT&T’s 70% DirecTV stake to merge it with EchoStar’s Dish
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The news: DirecTV will acquire EchoStar's video distribution businesses Dish Network and Sling TV to create the largest US pay-TV provider, in a deal seen as essential to the businesses' survival as streaming services draw millions of traditional TV viewers.
The numbers: DirecTV will pay a nominal USD1 ($1.44) and assume USD9.75 billion of Dish's debt. The deal will create a TV provider with around 20 million subscribers, but one facing intense competition from streaming services that are steadily eroding its subscriber base.
As part of the deal, TPG Angelo Gordon has provided EchoStar with USD2.5 billion in financing to refinance Dish’s upcoming November 2024 maturity and provide interim liquidity, according to the statement.
The deal is subject to regulatory and stakeholder approvals, with completion expected by the fourth quarter of 2025.
The context: In a related transaction announced earlier, TPG said it would buy the 70% stake in DirecTV it doesn’t already own from AT&T for USD7.6 billion in cash.
The merger will make it easier for customers to find and manage their favourite shows and subscriptions in one place, and is expected to result in cost synergies of at least USD1 billion annually.
EchoStar's overall debt load will reduce by USD11.7 billion, helping it refocus on building its 5G wireless network.
What they said: "With greater scale, we expect a combined DirecTV and Dish will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate, and distribute content tailored to customers' interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment," DirecTV CEO Bill Morrow said.
EchoStar president and CEO Hamid Akhavan said: “This agreement is in the best interests of EchoStar's customers, shareholders, bondholders, employees, and partners. With an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network.”
TPG’s partners David Trujillo and John Flynn said in a joint statement: "The Company's (DirecTV’s) acquisition of Dish TV and Sling TV positions it to again provide more choices and better value in an industry currently dominated by large streaming platforms.”
“This sale allows AT&T to continue to focus on being the leading wireless 5G and fiber connectivity company in America,” the company said in a statement.
The sources: AT&T statement , EchoStar statement , TPG statement , EchoStar deal details
