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Application moves Hughes merger closer

Mon, 12/03/2001 - 7:00pm
Anne Kerven

Taking their controversial merger a step closer to completion, General Motors, EchoStar Communications and Hughes Electronics applied to transfer certain licensing control to the proposed company.

The application asks the U.S. Federal Communications Commission to allow the trio to transfer control of the satellite, earth station and "other related authorizations" to the new entity.

The three announced in October they intended to merge the GM unit with EchoStar. At that time, News Corp., a long-time contender for the unit, walked out of talks and withdrew its offer. GM then agreed to sell Hughes to EchoStar for about $25 billion in stock and cash.

Under the deal, GM would spin off Hughes, which would then merge with EchoStar, with headquarters in Littleton, Colo. The combined company would use EchoStar's name and take the DirecTV brand for the products and services. EchoStar chief Charlie Ergen would be chair and CEO of the new group.

The entity would have 17 million satellite subscribers with the combination of Hughes' DirecTV with EchoStar's Dish Network, and would present a fierce competitor to the cable industry, proponents say.

The merger is under scrutiny from the antitrust unit of the U.S Department of Justice, as well as by the U.S. Internal Revenue Service and the U.S. Securities and Exchange Commission.

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