BANGALORE – EchoStar Corporation says it will buy Hughes Communications Inc. for US$2 billion, including Hughes debt expected to be refinanced in connection with the transaction. The transaction will boost EchoStar’s ability to transport video and data.
Under the terms of the transaction, EchoStar will pay Hughes shareholders $60.70 in cash for each of their shares. That’s a 1.7% discount to Hughes’s closing price on Friday—the stock has risen by more than 50% this year, amid reports that the company was looking to sell itself.
The transaction is expected to close later this year, subject to certain closing conditions including receipt of federal regulatory approvals. Investment funds affiliated with Apollo Management IV, L.P., who own a majority of Hughes’ outstanding stock, have approved the transaction by entering into written shareholder consent.
"We are very pleased to announce this transaction as it brings together the two premier providers of satellite communications services and delivers substantial value to our shareholders. By combining Hughes’ operational strength and proven record of customer satisfaction with EchoStar’s expertise in cutting edge satellite video technology, customers will benefit significantly from our shared institutional excellence,” said Pradman Kaul, President and Chief Executive Officer of Hughes.
"There is a unique and compelling fit between Hughes and EchoStar," said Michael Dugan, President and Chief Executive Officer of EchoStar. “With a rich engineering culture, an extensive fleet of owned and leased satellites, and experienced personnel in communications centers around the world, the combination of EchoStar and Hughes will create a powerful leader in video and data transport.”
