Monday, December 6, 2004

DirecTV Divests Satellite Operations

El Segundo-based DIRECTV Group and SkyTerra Communications announced this morning that DIRECTV will sell off DIRECTV's Hughes Network Systems assets to SkyTerra for approximately $360M in cash and stock. The divestiture continues DIRECTV's continued focus on its consumer satellite television business, after its purchase by News Corp. and Fox Entertainment. Hughes will be rolled into a new limited liability company 50 percent owned by SkyTerra and 50 percent owned by DIRECTV. SkyTerra is an affiliate of Apollo Management LP, a New York-based private equity firm. Hughes Network Systems provides broadband satellite networks and services to enterprises. According to the companies, the deal comes with $375M in debt financing for the new company. SkyTerra is acquiring its shares for $50M in cash and 300,000 shares of its common stock.

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