As per the deal thrashed out between News Corp, General Motors
and Hughes Electronics, Murdoch's media conglomerate will acquire
GM’s 19.9 per cent stake in Hughes and a further 14.1 per cent of
Hughes from public shareholders and GM’s pension and other benefit
plans. At closing, News Corp.’s 34 per cent ownership interest will
be transferred to Fox Entertainment Group (FEG), an 80.6 per cent-owned
News Corp subsidiary, in exchange for a $4.5 billion promissory
note and approximately 74.2 million shares in Fox at $27.99 per
share, increasing News Corp.’s equity interest in FEG to approximately
82 per cent.
If the deal goes through, it will trigger a clause in a previous agreement
News Corp has with John Malone's Liberty Media to make him a partner.
Fallen by the wayside are potential suitors Cablevision Systems and
Murdoch should soon be raising a toast to his DirecTV acquisition.
Following completion of the acquisition, which is subject to regulatory
approvals, a tax ruling, and GM stockholder approval, Murdoch will
become chairman of Hughes, while News Corp.’s former co-COO, Chase
Carey, will be president and CEO of Hughes. Hughes’ corporate senior
executive V-P Eddy Hartenstein will be vice-chairman and report
The businesses contained in Hughes include leading satellite broadcaster
DirecTV, which has more than 11 million subscribers in the United
States; an 81% equity holding in satellite operator PanAmSat; and
Hughes Network Systems, the world's leading provider of broadband
satellite network solutions.
A company release quoted Murdoch as saying yesterday: "Today
we announce a genuinely exciting and transforming deal for News
Corp., the Fox Entertainment Group and Hughes Electronics. The benefits
will be felt almost immediately in the competition it will offer
cable, the richer services it will provide to American viewers,
and the value it will create for the shareholders of Fox, News Corp.
"With Fox taking a significant interest in Hughes, we are
forging what we believe will be the premier diversified entertainment
company in America today, with leading assets in film, television
broadcasting and production, cable programming, and now pay-TV distribution.
The alignment of Fox’s valuable content assets and DirecTV’s distribution
platform will provide significant benefits to consumers and greatly
enhance the future businesses of both companies."
If and when approvals from antitrust regulators for the DirecTV
buyout come through, Murdoch's vision of controlling a global network
of pay-TV businesses that span the US, Britain, Europe, Asia, Latin
America and Australia will have been realised.
taken, DirecTV within grasping distance of Murdoch