DirecTV Cancels Merger With Dish Over Debt Swap

DirecTV announced this week that it is cancelling its merger with Dish due to concerns over a debt swap by bond holders.

The agreement hinged on Dish bondholders accepting a debt swap, which would have required them to exchange their existing holdings for new debt in the restructured company—a move that would have collectively cost them approximately $1.6 billion.

DirecTV Efforts to Acquire Dish

DirecTV’s withdrawal this week appears to mark the end of its years-long pursuit to acquire both Dish and Sling, following its initial bid in September.

DirecTV had proposed acquiring Dish TV and Sling TV from EchoStar in a deal involving a $1 payment and the assumption of roughly $9.8 billion in debt. The transaction depended on multiple conditions, including regulatory approval and bondholders agreeing to write off debt associated with Dish.

“DirecTV operates in a highly competitive video distribution industry,” DirecTV CEO Bill Morrow said in a statement in September. “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.”

Speculation about a potential merger between DirecTV and Dish has persisted for years with negotiations periodically resurfacing. The two companies nearly combined more than two decades ago, but the Federal Communications Commission blocked the $18.5 billion deal at the time, citing antitrust concerns.

Merger Canceled

In a statement on Thursday, Morrow said, “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 will advance our mission to aggregate, curate, and distribute content tailored to customers’ interests by pursuing…