Justice Dept Signals Dissent to EchoStar-DirecTV Merger

03 September 2002

The US Justice Department could be poised to hurl a spanner into the works of the mooted $18.3 billion (€18.55bn; £11.79bn) merger between EchoStar Communications and Hughes Electronics, the parent of rival satellite broadcaster DirectTV.

The merger of America’s two largest satellite operators is a long-running saga, with talks dragging on for eleven months after Rupert Murdoch’s angry flounceout from negotiations with Hughes – leaving the field open to EchoStar and ending the mogul’s dream of creating a global satellite TV empire [WAMN: 29-Oct-01].

But just as the EchoStar-Hughes deal seemed in sight of inking, word is that the Justice Department is about to issue a legal challenge to the merger. Claims analyst Blair Levin, a vocal opponent of the deal: “The [department’s] staff is preparing to litigate ... [and while] it’s often true that they prepare to litigate and then say ‘yes,’ generally speaking, it’s not a good sign.”

Also word around the big dishes is that EchoStar boss Charlie Ergen has lost his enthusiasm for the deal and may be seeking an escape route

Data sourced from: USA Today; additional content by WARC staff