10-29-01, 12:58 PM
Executives for General Motors, its Hughes Electronics unit and EchoStar, which is getting the auto maker's coveted satellite TV assets under a blockbuster merger deal, exchanged compliments during a conference in New York City Monday detailing the agreement between the companies.
EchoStar's Charlie Ergen, who will take control of the merged entity once the deal is complete, said his company is "extremely excited about this transaction." Under the deal, EchoStar will combine with Hughes and DirecTV, EchoStar's competitor in the DBS business.
Ergen praised DirecTV and its leadership, including DirecTV Chairman and CEO Eddy Hartenstein, who has been with the DBS service since its creation in the early 1990s and debut to consumers in 1994. Ergen called Hartenstein, "the father of the DBS business."
Hartenstein said he is "looking forward to working with Charlie and the EchoStar team" on the transition between the companies. Hartenstein and Hughes CEO Jack Shaw will work alongside Ergen and EchoStar President Michael Dugan on a transition team that will coordinate the merger.
GM said it expects the merger to close in the second half of 2002.
Ergen said synergies created between the companies cannot be ignored. For starters, a unified company would consolidate spectrum, eliminating the duplication of programming and allowing for more services, such as expanded local TV. (For a look at DBS spectrum, check out our spectrum charts at: www.skyreport.com/spectrum.htm (http://www.skyreport.com/spectrum.htm)
Based on closing prices Friday, the stock and cash transaction - valued by wire sources at $25.8 billion - offered Hughes shareholders a 20 percent premium. Ergen has pledged $2.75 billion of his own stock as collateral for the loan while Deutsche guaranteed another $2.75 billion.
The deal gives Hughes/GMH shareholders 53 percent of the new company, EchoStar's public shareholders 18 percent, GM shareholders 11 percent and Ergen 18 percent.
And what if the deal doesn't go through? EchoStar also reportedly agreed to pay about $5 billion in cash for PanAmSat, the commercial satellite operator 80 percent owned by Hughes.
From <a href="http://www.skyreport.com" target=none>SkyReport</a> (Used with permission)
EchoStar's Charlie Ergen, who will take control of the merged entity once the deal is complete, said his company is "extremely excited about this transaction." Under the deal, EchoStar will combine with Hughes and DirecTV, EchoStar's competitor in the DBS business.
Ergen praised DirecTV and its leadership, including DirecTV Chairman and CEO Eddy Hartenstein, who has been with the DBS service since its creation in the early 1990s and debut to consumers in 1994. Ergen called Hartenstein, "the father of the DBS business."
Hartenstein said he is "looking forward to working with Charlie and the EchoStar team" on the transition between the companies. Hartenstein and Hughes CEO Jack Shaw will work alongside Ergen and EchoStar President Michael Dugan on a transition team that will coordinate the merger.
GM said it expects the merger to close in the second half of 2002.
Ergen said synergies created between the companies cannot be ignored. For starters, a unified company would consolidate spectrum, eliminating the duplication of programming and allowing for more services, such as expanded local TV. (For a look at DBS spectrum, check out our spectrum charts at: www.skyreport.com/spectrum.htm (http://www.skyreport.com/spectrum.htm)
Based on closing prices Friday, the stock and cash transaction - valued by wire sources at $25.8 billion - offered Hughes shareholders a 20 percent premium. Ergen has pledged $2.75 billion of his own stock as collateral for the loan while Deutsche guaranteed another $2.75 billion.
The deal gives Hughes/GMH shareholders 53 percent of the new company, EchoStar's public shareholders 18 percent, GM shareholders 11 percent and Ergen 18 percent.
And what if the deal doesn't go through? EchoStar also reportedly agreed to pay about $5 billion in cash for PanAmSat, the commercial satellite operator 80 percent owned by Hughes.
From <a href="http://www.skyreport.com" target=none>SkyReport</a> (Used with permission)