DirecTV has officially terminated its agreement to acquire Dish Network and Sling TV from EchoStar Corp., following the failure to secure approval from Dish bondholders for a key debt exchange. The deal, originally valued at $1 plus the assumption of $9.75 billion in Dish debt, would have merged the two satellite TV providers into the largest U.S. pay-TV service, with a combined 20 million subscribers. However, the lack of consensus among bondholders effectively derailed the agreement.
The transaction hinged on Dish bondholders agreeing to exchange their debt at a discounted rate as part of the merger. Despite revised terms that reduced the bondholders' losses by $70 million, a group representing 85% of the $8.9 billion debt rejected the offer.
DirecTV CEO Bill Morrow said in a statement: “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," explained.
DirecTV had hoped the merger would enhance its market position amidst a challenging landscape for traditional satellite and cable providers, which have faced increasing pressure from streaming platforms. The company remains focused on delivering innovative content solutions.
This decision comes as DirecTV continues to prioritize financial stability and strategic partnerships. Supported by its long-term partner TPG, DirecTV believes it is well-positioned for the future despite the setback. The termination of the merger does not affect TPG’s planned acquisition of AT&T’s stake in DirecTV, signaling confidence in the satellite TV provider's standalone strategy moving forward.