After more than 20 years of rumors, false starts, and failed attempts, the two biggest satellite TV providers in the United States have officially announced that they will merge, creating the largest pay TV provider in the country. In recent weeks industry speculation about the possibility of a deal to combine DIRECTV and DISH TV has intensified, and on Monday, Sept. 30, it finally became official.

Key Details:

• DIRECTV will acquire DISH from EchoStar, which is expected to result in the largest pay-TV provider in the U.S.
• Also, TPG, which currently owns 30% of DIRECTV, will purchase the remaining 70% from AT&T.
• The two sides had attempted a merger in 2002 that was blocked by the Justice Department.

It was announced that DIRECTV has entered into a definitive agreement to purchase DISH and its live TV streaming service Sling TV from parent company EchoStar. Additionally, TPG Capital, which owns 30% of DIRECTV, has agreed to acquire the remaining 70% of the company that is currently owned by AT&T.

In a statement, DIRECTV argues that the creation of this larger company will create “a more robust competitive force in a video industry dominated by streaming services owned by large tech companies and programmers.”

Following a two-week carriage dispute with Disney earlier this month, DIRECTV was able to secure the right to divide the entertainment company’s channels amongst smaller, genre-specific lineups, removing the requirement for customers to pay for channels that they aren't interested in watching. The company hopes that by dramatically increasing its customer base, it will be able to further negotiate deals that allow it to provide more modern subscription options to consumers.

As of last report, DIRECTV had 11 million customers to its satellite and streaming platforms, while DISH had 6.1 and its streamer Sling had 2. Once the deal is finalized, that would give DIRECTV over 19 million subscribers, easily surpassing the country’s largest cable distributors Charter and Comcast, which each have just over 14 million customers.

“DIRECTV operates in a highly competitive video distribution industry,” DIRECTV CEO Bill Morrow said. “With greater scale, we expect a combined DIRECTV and DISH will be better able to work with programmers to realize our vision for the future of TV, which is to aggregate, curate, and distribute content tailored to customers’ interests, and to be better positioned to realize operating efficiencies while creating value for customers through additional investment.”

The transaction will also improve EchoStar’s financial profile as it continues to enhance and further deploy its new 5G Open RAN wireless network. DIRECTV will pay EchoStar $1 for DISH, but will also assume the company’s net debt of $9.75 billion.

DIRECTV and DISH previously attempted to merge in 2002, but were sued by the Department of Justice, blocking the combination on antitrust grounds. However, as the pay-TV industry has changed in the subsequent two decades, it is not believed that government regulators will move to block this acquisition. The traditional TV model has eroded significantly in recent years with the expansion of streaming. Nearly 47 million customers have left the pay-TV ecosystem in the past decade, with numerous distributors shutting down as a result.

The hope is that with this increased size, DIRECTV will be in an advantageous enough position to negotiate more flexible deals to be able to offer customers lower-priced subscription options that better fit their television needs.