10.12.2002
Hughes and EchoStar terminate proposed merger agreement

GM, Hughes Electronics Corporation, and EchoStar Communications Corporation announced the companies have reached a settlement to terminate the proposed merger of Hughes and EchoStar, effective immediately.

Under terms of the settlement, EchoStar has paid to Hughes $600 million in cash, and Hughes will retain its 81 percent ownership position in PanAmSat. Hughes, a world-leading provider of digital television entertainment, broadband services, satellite-based private business networks, and global video and data broadcasting, is a unit of General Motors Corporation. EchoStar Communications Corporation and its DISH Network satellite TV system provide over 500 channels of digital video and CD-quality audio programming as well as advanced satellite TV receiver hardware and installation nationwide. EchoStar is included in the Nasdaq-100 Index (NDX) which contains the largest non-financial companies on the Nasdaq Stock Market.

The companies reached this settlement because the proposed merger could not be completed within the time allowed by the merger agreement. This was due to action taken by the US Department of Justice, 23 states, the District of Columbia and Puerto Rico to block the merger as well as the Federal Communications Commission's decision to send the merger application to a hearing.

"We continue to believe that the proposed merger would have been a victory for consumers nationwide, and for our shareholders. We worked hard on it to get the required regulatory approval and are disappointed that we were not able to complete the merger," said Hughes President and Chief Executive Officer Jack A. Shaw. "However, since the merger couldn't be completed, we concluded that this settlement is the best alternative for Hughes and places us in the best position to move ahead with our business."
As a result of the merger termination, EchoStar will take an approximate $700 million write off in the fourth quarter for the merger breakup fee and other related merger expenses.