US satellite TV business DirecTV (NASDAQ:DTV) is backing out of its agreement to acquire EchoStar’s video distribution business, which includes rival Dish TV.
DirecTV (NASDAQ:DTV) said it has notified EchoStar of its intention to cancel the acquisition after bondholders, holding $10.7 billion in debt, rejected a proposed debt swap that would have resulted in a $1.6 billion loss. The deal was contingent on bondholder approval of the terms.
The proposed merger, first announced in September, would have created one of the largest TV distributors in the US with 20 million subscribers.
"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," DirecTV CEO Bill Morrow said in a statement.
"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. We are well positioned for the future with a strong balance sheet and support from our long-term partner TPG."
The cancellation of the DISH acquisition does not affect TPG's acquisition of the remaining 70% stake in DirecTV from AT&T, which is expected to be completed in the second half of 2025.