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5 Mergers That Failed


1. DirecTV-DISH (2002)

General Motors
(GM)-controlled Hughes Electronics Corp., owner of DirecTV, attempted to merge with EchoStar Communications Corp., owner of the (DISH) Network, in 2002 in a $26 billion deal that would have combined the two largest U.S. satellite-TV operators. (EchoStar changed its name to DISH in 2008)

The 13-month dance ended when U.S. and state anti-trust enforcers sued to stop the deal, asserting that it would eliminate a pay-TV competitor in nearly all regions of the country, thereby making it more likely that subscription fees would rise and programming choices would be curtailed.

Twelve years later, DirecTV is trying to merge it operations with AT&T, and Dish is anxiously looking for a broadband partner. 

Back in 2002, telecommunications and media distribution looked very different. Not only was there a Republican in the White House, but widespread use of online streaming was just a vision of a handful of clairvoyant technologists. In retrospect, the fact that Republican regulators vetoed a DirecTV-Dish merger speaks to the outsized presence that satellite-TV operators had in those days before broadband connectivity became the real growth engine of telecom operators.

As for the deal, EchoStar Chairman and controlling shareholder Charlie Ergen was forced to pay Hughes a $600 million break-up fee, though Dish gained more subscribers than DirecTV during the process, and helped to raise the smaller rival's national profile.

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