DirecTV clinches long-elusive deal to combine with Dish

DirecTV on Monday agreed to buy EchoStar's satellite television business that includes Dish TV, capping decades of on-and-off talks to create one of the nation's largest pay-TV distributors with a combined 20 million subscribers.

The transaction comes at a time when satellite TV services DirecTV and Dish are hemorrhaging market share to competitors like Netflix and Amazon's Prime Video, which have benefited from changing consumer habits and the rising popularity of streamed video.

DirecTV CEO Bill Morrow told Reuters the combined pay TV company would have the clout to negotiate smaller programming packages tailored to consumers' interests.

It also plans to offer an improved viewer experience that makes it easier for subscribers to find their favorite shows - whether on a traditional TV channel or via streaming - and manage their subscriptions from one place.

"We believe that consumers don't want to be the aggregators - or at least a majority of consumers in the marketplace would not prefer to have to go out and manage all these multiple accounts of those direct-to-consumer SVOD services," Morrow said in an interview, using the industry term for streaming, or subscription video-on-demand.

As part of the two-step transaction, DirecTV will pay $1 to buy the pay-TV business called Dish DBS that includes Dish and Sling TV, while agreeing to assume about $9.75 billion of Dish's debt, the companies said in a statement. Dish and DirecTV are launching an exchange offer at a discounted rate for the debt to help extend the maturities.

For the deal to go through, Dish DBS debtholders will have to agree to take a haircut on the debt by about $1.57 billion. With the exchange offer, Dish is attempting to convince its bondholders to become