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Thomson Buys DirecTV's Set Top Biz

Thomson has bought DirecTV's set-top box manufacturing business from Hughes Network Systems, for $250 million.

The purchase of HNS's decoder assets is part of a five-year supply agreement in which Thomson will be involved in developing new DirecTV set-top boxes and receivers including DirecTV HD PVRs. Based on the contract terms, Thomson expects to more than double its current annual revenues with DirecTV. In addition, the agreement includes incentives to DirecTV based on revenues and set-top box order volume to Thomson that could increase the amount paid to as much as $400 million, including the upfront amount. Thomson, which has been a longtime supplier of DirecTV set-tops expects to supply more than 50 percent of its set-tops.

HNS' principle business will consist of DIRECWAY broadband satellite networks and SPACEWAY Ka-band satellite system, planned for commercial launch in 2005 as well as satellite-based communications systems, networks and equipment.