EchoStar and Hughes Network have scuttled their fight to save a merger that faced unanimous opposition from federal regulators.
The decision to end the merger, which would have combined EchoStar's DISH network with Hughes DirecTV service into one mega-satellite TV provider was made because it could not be completed within the time allowed by the merger agreement. As a result of the failed merger, EchoStar will pay Hughes $600 million in cash and Hughes will retain its 81 percent ownership position in PanAmSat. EchoStar will take an approximate $700 million write off in the fourth quarter for the merger breakup fee and other related expenses.
EchoStar chairman Charlies Ergen, expressed disappointment over the merger's failure but said that his company "will continue to seek alternative, innovative ways to provide competition to the rapidly consolidating cable industry and to provide more choices for all consumers."
Hughes President and CEO Jack Shaw says "We continue to believe that the proposed merger would have been a victory for consumers nationwide and for our shareholders...However, since the merger couldn't be completed, we concluded that this settlement is the best alternative and places us in the best position to move ahead with our business."
The decision could pave the way for Rupert Murdoch's News Corp. to revive its previously failed bid to acquire DirecTV.
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