MUMBAI: EchoStar Corporation, a telecommunication company, will acquire the broadband satellite technologies and services company Hughes Communications for approximately $2 billion.
According to the companies, this combination would create a worldwide leader in satellite delivered video and broadband services.
EchoStar will acquire all of the outstanding equity of Hughes and its subsidiaries including its main operating subsidiary, Hughes Network Systems. Also Hughes debt is expected to be refinanced in connection with the transaction.
Says Hughes president and CEO Pradman Kaul, "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."
The transaction is expected to close later this year, subject to certain closing conditions including receipt of federal regulatory approvals.
Adds EchoStar CEO and president Michael Dugan, "There is a unique and compelling fit between Hughes and 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."
The boards of directors of both companies have agreed that Hughes‘ shareholders will receive $60.70 per share without interest, which represents a premium of 31 per cent over Hughes‘ unaffected closing share price of $46.43 on 19 January 2011.
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.
