Hughes Electronics To Buy U.S. Satellite Broadcasting in $1.3B Deal
Reuters
EL SEGUNDO, Calif. (Dec. 14) - Hughes Electronics Corp. said Monday it will acquire U.S. Satellite Broadcasting Co. Inc. for $1.3 billion in a move to strengthen its DIRECTV satellite television business.
Hughes Electronics, a unit of General Motors Corp., said in a statement the value of the transaction was based on Friday's $38.25 per share closing price of GM's class H common stock.
Hughes said it will combine its DIRECTV business, which has more than 4.3 million subscribers, with U.S. Satellite's assets and business at the 101 degree west longitude orbital slot.
The transaction also includes U.S. Satellite's three frequencies at 110 degrees west longitude, which Hughes plans to use for DIRECTV's Spanish-language services once it receives Federal Communications Commission approval.
Upon completion of the merger, DIRECTV will consolidate billing, customer service, remittance processing and broadcasting centers now maintained by U.S. Satellite, Hughes said.
U.S. Satellite shareholders may receive 0.3775 shares of GM class H stock for each outstanding share, or the cash equivalent. The exchange ratio is fixed as long as the 20-trading day weighted average price of the class H stock ending two days before the closing date is within a range of $27.82 to $47.68 per share.
The merger is subject to U.S. Satellite shareholder approval and certain regulatory and antitrust clearances. It is expected to close in mid-1999.
U.S. Satellite said in June that it wanted to concentrate more on its business at the 101 west longitude location, which it shared with DIRECTV.
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