GM Mulls Disposal of Hughes Electronics, DirecTV

22 January 2003

Auto giant General Motors will next month instigate a formal review of the future of its communications subsidiary Hughes Electronics , including its satellite television unit DirecTV, whose planned merger with rival EchoStar Communications was blown out of the water last year by federal regulators on antitrust grounds [WAMN: 25-Nov02].

According to the Financial Times, the GM board will meet February 4 to hear a detailed presentation of the options open to Hughes/DirecTV which between them lost $467 million (€436.21m; £289.50m) last year in their struggle to wrest pay-TV subscriptions from a brutally competitive marketplace.

The directors will consider four options:

• Retention of the businesses
• A trade sale
• Initial public offering
• A buyout partnership with private equity groups

Rupert Murdoch, patient as a leopard over the past two years, now has the luxury of choosing his prey: DirecTV or Charlie Ergen’s EchoStar [WAMN: 21-Jan-03].

Data sourced from: Financial Times; additional content by WARC staff