SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported) January 22, 1999
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GENERAL MOTORS CORPORATION
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(Exact name of registrant as specified in its charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
100 Renaissance Center, Detroit, Michigan 48265-1000
3044 West Grand Boulevard, Detroit, Michigan 48202-3091
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (313)-556-5000
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ITEM 5. OTHER EVENTS
On January 22, 1999, General Motors Corporation's (GM) subsidiary, Hughes
Electronics Corporation (Hughes), issued the following news release covering an
agreement to acquire PRIMESTAR, Inc.'s direct broadcast satellite medium-power
business and related Tempo high power satellite assets. The news release is as
follows:
Hughes to Acquire PRIMESTAR
DIRECTV Will Acquire PRIMESTAR Subscribers And Expand Channel Capacity
EL SEGUNDO, CA, January 22, 1999 - Hughes Electronics Corporation, a
unit of General Motors Corporation, announced today that it reached an agreement
with PRIMESTAR, Inc., to acquire the 2.3 million-subscriber PRIMESTAR direct
broadcast satellite (DBS) medium-power business and related Tempo high-power
satellite assets in two transactions valued at approximately $1.82 billion.
The combination of DIRECTV(R) and PRIMESTAR, along with United States
Satellite Broadcasting (USSB), the premium multi-channel movie service which
agreed to merge with Hughes last month, advances DIRECTV's position as the
premier digital multi-channel video platform in the United States. Upon
completion of these transactions, DIRECTV will feature:
- More than 7 million U.S. subscribers;
- More than 370 entertainment channels delivered through five
high-power DBS spacecraft: DBS-1, -2 and -3, a high-power Tempo
satellite and DIRECTV 1-R (planned for launch in mid-1999);
- The broadest distribution network in the DBS industry, combining
more than 26,000 points of retail sale with PRIMESTAR's rural and
small urban-based distribution network; and
- High-power DBS frequencies at each of the three orbital slots that
provide full coverage of the continental United States: 101 degrees
West longitude (WL), 110 degrees WL and 119 degrees WL.
"We were the first to introduce high-power DBS service nearly five
years ago, and our pending transactions with USSB and now PRIMESTAR will extend
DIRECTV's market leadership," said Michael T. Smith, chairman and chief
executive officer of Hughes Electronics. "With the addition of the Tempo
high-power satellite assets, DIRECTV is well-positioned to capitalize on such
emerging consumer services as high-definition television, data enhanced
broadcasting and other interactive services. We expect to create new and
innovative revenue streams that will add significant value for GM Class H
shareholders."
Benefits to Subscribers
"The integration of DIRECTV, USSB and PRIMESTAR will create a powerful
platform to distribute digital video and other services that realizes the full
potential of DBS," said Eddy W. Hartenstein, president of DIRECTV. "We will
carry more than 370 channels that may be accessed from every state in the
continental U.S., and we'll be able to offer consumers a broad range of
conventional and all-new data and interactive services.
"In addition, PRIMESTAR's network of agents, master agents and
full-service providers adds an important rural and small urban component that
complements DIRECTV's largely urban/suburban retail distribution network. In
short, these transactions are going to make high-power satellite television
easier to get for more Americans than ever before," added Hartenstein.
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DIRECTV and its consumer electronics manufacturing partners will
introduce new DIRECTV System equipment later this year designed to seamlessly
integrate programming distributed from multiple orbital locations. These new
DIRECTV Systems will integrate DIRECTV's core subscription services at 101
degrees WL with the new services to be introduced at 119 degrees WL; likewise,
DIRECTV is creating a single dish, dual-satellite receiving system to integrate
DIRECTV's core programming with Spanish-language services to be launched later
this year at 110 degrees. A consumer-friendly single-dish receiving system that
integrates programming distributed from all three orbital locations - 119, 101
and 110 degrees - is also planned.
PRIMESTAR Subscriber Transition to DIRECTV
PRIMESTAR currently operates a 160-channel medium-power service using
leased satellite capacity at 85 degrees WL. DIRECTV will operate the
medium-power PRIMESTAR business for a period of approximately two years, during
which time it will transition PRIMESTAR subscribers to the high-power DIRECTV
service.
"By combining with DIRECTV, PRIMESTAR fulfills its long-sought goal of
providing its subscribers with an opportunity for high-power service," said
Hartenstein. "PRIMESTAR has built a successful business, and for two years has
captured J.D. Powers' top customer satisfaction rating in the cable and
satellite television category. We are pleased to serve PRIMESTAR's subscribers
and look forward to introducing them to the expanded programming opportunities
and services of DIRECTV."
During this transition period, PRIMESTAR's distribution network will
continue servicing PRIMESTAR subscribers and begin to offer the DIRECTV System
to new subscribers.
Terms of the Transactions
The transactions are comprised of 1) the acquisition of the PRIMESTAR
medium-power DBS business, and 2) the purchase of the Tempo high-power satellite
assets. PRIMESTAR will receive approximately $1.32 billion for the medium-power
DBS business, comprised of approximately 4,871,000 shares of General Motors
Class H (GMH) common stock and $1.1 billion cash. Hughes will also pay $500
million cash for the Tempo high-power satellite assets. Together, the
transactions provide DIRECTV with:
- 11 high-power DBS frequencies at 119 degrees WL, from which the
in-orbit Tempo satellite can begin delivering programming on a
national basis at any time;
- A second Tempo satellite, which is already built and can be
launched at a future date or be used as a back-up satellite to
secure uninterrupted service for DIRECTV subscribers; and
- Increased revenues immediately from over 2.3 million existing
PRIMESTAR subscribers, and ongoing revenues from these subscribers
as they are transitioned to DIRECTV.
The transactions have been approved by the Boards of Directors of
Hughes and PRIMESTAR, and are subject to approval by the Board of Directors of
General Motors, consent of certain PRIMESTAR lenders and receipt of appropriate
regulatory and antitrust approvals.
The earnings of Hughes Electronics are used to calculate the earnings
per share attributable to GMH (NYSE symbol) common stock. DIRECTV is the
nation's leading direct broadcast satellite service with more than 4.5 million
subscribers. DIRECTV is a registered trademark of DIRECTV, Inc., a unit of
Hughes Electronics Corporation. Visit Hughes and DIRECTV on the World Wide Web
at www.hughes.com and www.directv.com, respectively.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
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(Registrant)
Date January 22, 1999
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By
s/Peter R. Bible
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(Peter R. Bible,
Chief Accounting Officer)
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