On the heels of regulatory approval from the Justice Department and the Federal Communications Commission (FCC) earlier this week, Liberty Media completed its deal with News Corp. yesterday for a controlling interest in DirecTV.
The $12-billion deal was first announced in 2006 (story here). Under terms of the transaction, Liberty Media traded its 16 percent ownership of stock in Rupert Murdoch’s News Corp. in return for News Corp.’s 39 percent stake in DirecTV. Aside from swapping shares, the deal also included $625 million in cash and three regional sports networks from News Corp. to Liberty Media.
The deal gives Liberty Media founder John Malone a 41 percent controlling interest in DirecTV, while Murdoch now has control over News Corp.
John Malone and Liberty Media CEO Greg Maffei have been appointed to the DirecTV board of directors, filling two of the three seats previously held by News Corp. representatives. Chase Carey will continue to serve as DirecTV’s president and CEO.
"This transaction is strategically important, financially attractive and will provide new focus to Liberty Media," said Maffei. "We've been impressed with Chase Carey and his team and are thrilled to welcome them to the Liberty family. We look forward to a partnership with DirecTV."
The previously announced reclassification of Liberty Capital Tracking stock is expected to be completed in the next three to five business days, and the new Liberty Entertainment and Liberty Capital tracking stocks will commence trading early next week. Liberty Entertainment will comprise DirecTV, Starz, WildBlue Communications and Fun Technologies.
On Tuesday, a spokeswoman for the Justice Department said an investigation into the $12-billion deal did not find support for any action against the transaction (story here).
The Justice Department’s announcement followed Monday’s news that the FCC had voted in favor of the deal (story here).
While saying that allowing the deal to go forward was in the best interest of the public, the FCC also stipulated that Liberty Media and DirecTV abide by program access and other requirements that it had previously imposed on News Corp. in order to preserve competition.
The FCC did require that business relationships between Liberty Global’s Liberty Cablevision of Puerto Rico and DirecTV come to an end within a year. Liberty Global is a spin-off from Liberty Media.
DirecTV is the nation’s largest satellite provider with about 16 million subscribers.
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