09:50 AM EDT, 09/30/2024 (MT Newswires) -- EchoStar ( SATS ) agreed to sell its video distribution business, which includes Dish TV and Sling TV, to satellite television provider DirecTV in a debt-exchange transaction, the companies said Monday.

DirecTV will pay a nominal consideration of $1 to buy the business, called Dish DBS, and assume roughly $9.75 billion of its debt. DirecTV and Dish DBS have launched exchange offers for five series of the debt, and are seeking consents from noteholders to facilitate the acquisition.

Completion of the exchange requires the bondholders to agree to a principal write-off of at least $1.57 billion, according to the joint statement. The deal is anticipated to complete in the fourth quarter of 2025, subject to the completion of a pre-closing reorganization and approval from regulators.

The combination "will benefit US video consumers by creating a more robust competitive force in a video industry dominated by streaming services owned by large tech companies and programmers," according to the joint statement. The combined company is expected to bring together multiple content sources under one platform.

TPG Angelo Gordon and certain of its co-investors, as well as DirecTV, provided $2.5 billion to refinance Dish DBS' debt maturing in November.

The sale will allow EchoStar ( SATS ) to "alleviate a material portion" of its financial constraints and further bolster its 5G open radio access network cloud-native wireless network. Upon completion, EchoStar ( SATS ) expects to have reduced its total consolidated debt by about $11.7 billion and its refinancing needs through 2026 by $6.7 billion.

"With an improved financial profile, we will be better positioned to continue enhancing and deploying our nationwide 5G Open RAN wireless network," EchoStar ( SATS ) Chief Executive Hamid Akhavan said. "This will provide US wireless consumers with more choices and help to drive innovation at a faster pace."

DirecTV CEO Bill Morrow and Chief Financial Officer Ray Carpenter will continue to lead the company. "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," Morrow said.

Separately, AT&T ( T ) said it agreed to sell its entire 70% stake in DirecTV to asset management firm TPG (TPG) and receive roughly $7.6 billion in cash proceeds through 2029, according to a regulatory filing. The deal is expected to complete in the second half of 2025, and is not dependent on DirecTV's acquisition of Dish DBS.

TPG said it will make an initial payment of $2 billion, subject to certain deductions, to AT&T ( T ) during 2025 and additional payments totaling $500 million in 2029. DirecTV is expected to make a special distribution of at least $1.625 billion prior to March 31, 2025, to its equity holders, TPG said in a statement.

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