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GM proposes to split off Hughes and divest its interest in Hughes
such that Hughes will become a separate and independent company.
As a result of these and several related transactions, News Corp.
will control a 34 per cent interest in Hughes, three GM employee
benefit trusts managed by an independent trustee will have a combined
approximately 20 per cent interest in Hughes, and the remaining
46 per cent interest in Hughes will be held by the general public.
The transaction - which is subject to several conditions, including
regulatory approvals, a tax ruling, and GM and Hughes stockholder
approval - will be accomplished in a series of interrelated steps
that transpire essentially simultaneously.
Reports indicate that The Federal Communications Commission's review
of the proposed deal will in all probability centre on the combined
company's potential power over content distribution.
The companies had agreed that once merged they would continue making
programming available to all multi-channel distributors on non-discriminatory
terms. At the time of the deal closing the 34 per cent ownership
interest will be transferred to Fox Entertainment Group.
FCC Chairman Michael Powell has been quoted in a Reuters report
saying, "I think the principle focus of the transaction we'll be
looking at are content related issues. I think it's a helpful step.
Those are the bevy of issues that will concern the government --
including the antitrust division -- whether they're complete or
satisfactory I don't know yet."
Readers will recall that last year the FCC gave DirecTV's proposed
combination with EchoStar Communications the thumbs down as it feared
that the combined entity would create a monopoly that would desatroy
competition.
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