DirecTV calls off buyout of rival Dish, possibly ending a yearslong pursuit

DirecTV is calling off its planned buyout of rival Dish after the propose was rejected by debt safety holders at that business.

The deal was reliant on Dish debt safety holders agreeing to trade in the debt they held for debt in the recent business, a swap that would have expense them about $1.6 billion, collectively.

The retreat by DirecTV this week may complete a years-long attempt by the business to acquire both Dish and Sling after it announced the bid in September.

DirecTV was looking to acquire Dish TV and Sling TV from its owner EchoStar in a debt swap swap that included a settlement of $1, plus the assumption of approximately $9.8 billion in debt. The deal was contingent on several factors, including regulatory approvals and bondholders writing off debt related to Dish.

“While we believed a combination of DirecTV and Dish would have benefited all stakeholders, we have terminated the swap because the proposed swap terms were essential to protect DirecTV’s settlement sheet and our operational flexibility,” DirecTV CEO statement Morrow said in a statement.

The prospect of a DirecTV-Dish combo has long been rumored, and reported talks resurfaced over the years. And the two almost merged more than two decades ago — but the Federal Communications fee blocked the deal valued at the period at $18.5 billion deal, citing antitrust concerns.

The pay-for-TV trade has shifted significantly since. As more and more consumers tune into online streaming platforms, demand for more traditional satellite entertainment continues to reduce.

DirecTV says that it will continue to invest in next-creation streaming platforms and propose recent packaging options while integrating content from live TV alongside direct-to-buyer services.

AT&T purchased DirectTV for $48.5 billion back in 2015. But in 2021, following the deficit of millions of customers, AT&T sold a 30% stake of the business to private ownership firm TPG for $16.25 billion.

The termination of the deal doesn’t impact TPG’s buyout of the remaining 70% stake in DirecTV from AT&T for about $7.6 billion, which is expected to close next year.