Major in the telecommunications industry for its satellite solutions and technology, EchoStar Corporation has taken over Hughes (News - Alert) Communication, thus acquiring all outstanding equity of Hughes and its subsidiaries that include Hughes Network Systems and Hughes debt by EchoStar.
The transaction is valued at approximately $2 billion and is bound to enhance EchoStar's capabilities for broadband transport of video and data.
As per the agreement brought into effect by the approval of both the companies’ board of directors, each of Hughes’ shareholders will receive $60.70 per share without interest that amounts to a premium of 31 percent over Hughes' unaffected closing share price of $46.43 as projected on Jan. 19.
After complying with all the closing conditions that includes receipt of federal regulatory approvals, the acquisition will be completed by the end of the year. As a major shareholder of Hughes’ outstanding stock, investment funds affiliated with Apollo Management IV, L.P., have also given written consent for the transaction.
In a release, Pradman Kaul, president and chief executive officer of Hughes said, “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.”
Michael Dugan, president and chief executive officer of EchoStar said, “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.”Carolyn John is a Contributor to TMCnet. To read more of her articles, please columnist page.
Edited by Janice McDuffee