DIRECTV announced Friday it would terminate its agreement to acquire EchoStar Corp’s video distribution business, DISH DBS.

The decision follows DISH DBS noteholders’ refusal to accept EchoStar’s proposed Exchange Debt Offer Terms, a critical condition for the deal to proceed.

EchoStar ( SATS ) stock tanked after the update.

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DirecTV CEO Bill Morrow said “the proposed Exchange Terms were necessary to protect DirecTV’s balance sheet and our operational flexibility.”

DirecTV agreed to acquire EchoStar’s video business for $1 and assume Dish DBS’s net debt. The companies launched an exchange offer for five Dish DBS note series totaling approximately $9.75 billion in face value.

DirecTV plans to continue investing in next-generation streaming technologies and developing new packaging options integrating live TV with direct-to-consumer platforms. The company aims to provide customers with enhanced flexibility and tailored content options that align with evolving viewer preferences.

The termination of the DISH acquisition does not impact TPG’s plan to purchase the remaining 70% stake in DirecTV from AT&T Inc ( T ) , which remains scheduled to close in the second half of 2025. This strategic move is expected to strengthen DirecTV’s market positioning further.

EchoStar ( SATS ) reported a third-quarter loss of 52 cents per share, missing analysts’ expected loss of 37 cents. Revenue came in at $3.89 billion, a 5.3%, falling short of the $3.909 billion consensus estimate.

During the quarter, net Pay-TV subscribers declined by 43,000, while Sling TV added 145,000 new users. The company closed the period with 8.03 million Pay-TV subscribers, including 5.89 million for DISH TV and 2.14 million for Sling TV.

Price Action: EchoStar’s shares are trading lower by 3% to $22.86 at last check Friday.

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Image via DirecTV