DIRECTV and EchoStar (NASDAQ: SATS) have entered into a definitive agreement under which DIRECTV will acquire EchoStar’s video distribution business DISH DBS (“DISH”), including DISH TV and Sling TV, through a debt exchange transaction.
The combination of DIRECTV and DISH will benefit U.S. video consumers by creating a more robust competitive force in a video industry dominated by streaming services owned by large tech companies and programmers. The transaction will provide consumers with compelling video options while separately improving EchoStar’s financial profile as it continues to enhance and further deploy its nationwide 5G Open RAN wireless network
Transaction Details
Under the terms of the purchase agreement, DIRECTV will acquire EchoStar’s video distribution business, including DISH TV and Sling TV, in exchange for a nominal consideration of $1 plus the assumption of DISH DBS net debt. DISH Network will also benefit from the releases of a substantial amount of intercompany receivables, including spectrum, but will have contractually limited access to the cash flow generated by its business between signing and closing.
DISH DBS and DIRECTV have commenced the Exchange Offer for five different series of DISH DBS notes with a total face value of approximately $9.75 billion, including seeking certain consents from the holders of such notes to facilitate the acquisition. The indentures governing the new DISH DBS notes will provide for an amendment without the consent of holders of the new DISH DBS notes to allow for the mandatory exchange of such notes following receipt of certain regulatory approvals and provided the acquisition has been or will be consummated before the outside date described in the purchase agreement, into a reduced principal amount of DIRECTV debt which will have terms and collateral that mirror DIRECTV’s existing secured debt.
Such mandatory exchange is conditioned, amongst other things, on an aggregate reduction in the principal amount of DISH DBS’ notes in such exchange of at least $1.568 billion. If noteholders do not accept the Exchange Offer on terms satisfactory to DIRECTV, including to the extent the above mentioned minimum principal reduction is not achieved, it has the right to terminate the acquisition without closing.
The transaction is subject to various closing conditions, including, but not limited to, a requisite amount of the outstanding DISH DBS notes being tendered into the Exchange Offer, completion of a pre-closing reorganization, and receipt of required regulatory approvals.
In addition, TPG Angelo Gordon and certain of its Co-Investors, as well as DIRECTV, provided $2.5 billion of financing to fully refinance DISH DBS’ November 2024 debt maturity. The proceeds of the funding will be distributed to DISH DBS via a secured intercompany loan to fully repay DISH DBS’ November 2024 debt maturity and for general corporate purposes. The financing can be exchanged or refinanced into DIRECTV debt at the closing of the acquisition.
Upon closing of this transaction, DIRECTV will be led by a proven management team that reflects the strengths and capabilities of both organizations. DIRECTV will continue to be led by Bill Morrow, DIRECTV’s Chief Executive Officer, and Ray Carpenter, DIRECTV’s Chief Financial Officer. The combined company will be headquartered in El Segundo, California.
The transaction, which the boards of directors of both companies have unanimously approved, is expected to close in the fourth quarter of 2025, subject to the receipt of regulatory approvals, the successful closing of the Exchange Offer, and the satisfaction of other customary closing conditions.
“We built our business to provide bespoke financing solutions. We are pleased to partner with DIRECTV and DISH DBS on a transaction that is value-enhancing for all stakeholders,” said Ryan Mollett, Partner, and Michael Ginnings, Managing Director, TPG Angelo Gordon.
“DIRECTV operates in a highly competitive video distribution industry,” said Bill Morrow, Chief Executive Officer, DIRECTV. “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.“
“This agreement is in the best interests of EchoStar’s customers, shareholders, bondholders, employees, and partners,” said Hamid Akhavan, President and Chief Executive Officer, EchoStar. “With an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network. This will provide U.S. wireless consumers with more choices and help to drive innovation at a faster pace. We expect DISH and EchoStar bondholders to benefit from two companies with stronger financial profiles and more sustainable capital structures.”
“DIRECTV was founded 30 years ago to give consumers greater choices than incumbent cable companies for video content, and the Company’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,” said David Trujillo and John Flynn, Partners at TPG. “Our ability to execute these transactions, alongside our proposed acquisition of AT&T’s 70% stake in DIRECTV announced earlier today, exemplifies the unique capabilities of the TPG platform and our experienced sector-focused investment approach as we support DIRECTV’s continued investment in innovating the next generation of video services that benefit consumers.”
TPG Inc. (NASDAQ: TPG) and AT&T Inc. (NYSE: T) also announced a definitive agreement under which TPG will acquire from AT&T the remaining 70% stake in DIRECTV that it does not already own.
TPG will invest in DIRECTV through TPG Capital, the firm’s U.S. and European private equity platform. The transaction between TPG and AT&T is expected to close in the second half of 2025, subject to customary closing conditions. Completion of this transaction is not contingent on DIRECTV’s acquisition of DISH
Please visit www.BrighterTVFuture.com for more information and updates about the transaction.
