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In 2001, General Motors (then parent company of Hughes Electronics, which owned DirecTV) agreed to sell Hughes to EchoStar (then essentially Dish Network) for $ 26 billion. The agreement was never finalized because it has been subject to significant antitrust review by the FCC, the Department of Justice, and many states.
The parties briefly flirted with the idea again in 2014, before AT & T took the initiative in acquiring DirecTV. Now, although nothing is imminent, Dish Network has again contacted AT & T and DirecTV about a possible merger, likely the result of constant subscriber losses for both companies.
From Scott Moritz and Nabila Ahmed to Bloomberg:
"Both companies are seeing a substantial drop in the number of customers, and when that happens, management teams start planning," said John Hodulik, an analyst at UBS. "As we have seen in this industry, this has generally led to consolidation." Hodulik wrote a research note Thursday outlining the benefits of such a merger.
Dish and AT & T representatives declined to comment. The two companies do not have any negotiations going on, according to the people who asked not to be identified during internal discussions. In a second merger trial in 2014, Dish's president, Charlie Ergen, approached DirecTV. But AT & T burst in the following weeks and decided to buy DirecTV for $ 48.5 billion.
Dish rose 6.3% to $ 38.47, the largest increase since January, after Bloomberg announced that companies would consider consolidating their satellite television business. AT & T gained 1%.
Bloomberg offers this realistic scenario, with the sale of DirecTV to Dish by AT & T, while possibly retaining a stake in a few important areas:
Every business could reap real benefits from an agreement. According to Hodulik, AT & T could retain a minority interest in the television sector and a portion of its cash flow. He could also get valuable waves belonging to Dish for his wireless business nationwide. If Dish controlled the satellite sector, it would have approximately 29 million subscribers, becoming the largest pay-TV service in the US and reducing programming costs.
Antitrust concerns would certainly always be a factor, but 2019 is a world very different from 2002 or even 2014. At the time, if you wanted a TV provider and did not want to use your local cable company, DISH or DirecTV were enough the only options. Now, it appears that another streaming service is constantly appearing to offer content, including services such as Hulu Live, Google's YouTube TV, and AT & T's own U-Verse, which mimic offers. traditional TV providers.
In this landscape, the idea of unifying the strengths of DirecTV and Dish seems much less threatening to the average consumer, especially if we consider the decreasing number of total subscribers between the two .
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