Hughes Completes Acquisition Of PRIMESTAR Medium-Power DBS Business

Hughes Electronics Corporation has announced it has completed its acquisition of the PrimeStar medium-power direct broadcast satellite (DBS) business.The acquisition of PrimeStar gives DirecTVÆ - a unit of Hughes Electronics - the broadest distribution network in the DBS industry, combining DirecTVís national network of consumer electronics retail stores with PrimeStarís approximately 2.3 million subscribers to revenues from its existing 4.8 million subscribers.As previously announced, the consideration Hughes is paying for PrimeStarís medium0power DBS business is comprised of 4,871,000 shares of General Motors Class H (GMH) common stock and $1.1 billion in cash.PrimeStarís subscribers will be seamlessly transitioned to DirecTVís high-power service via PrimeStarís former national distribution network of agents, master agents and full-service providers.""DirecTV is a significant growth driver for Huges and our acquisition of PrimeStar will increase DirecTVís market share, and create value for all GM Class H Stockholders,"" said Michael T. Smith, Chairman and CEO of Hughes. ""We were the first to launch a high-power DBS business and this acquisition makes DirecTV the nationís third-largest multichannel video distributor, putting us on par with the nationís largest cable operators.""""The closing of the PrimeStar acquisition gives us more than 7 million subscribers and significantly extends our industry leadership position,"" said Eddy W. Hartenstein, President of DirecTV. ""The completion of the PrimeStar acquisition makes it easier than ever before for consumers to get DirecTV regardless of where they live. As DirecTV service becomes more readily accessible to cable subscribers everywhere, we expect even more of them to switch to our service.""DIrecTV will operate the PrimeStar medium-power business from PrimeStarís headquarter in Denver for approximately 24 month, during which time it will transition PrimeStarís former distribution and service network will continue to provide service to PrimeStar subscribers.More than 870 PrimeStar employees have accepted employment with DirecTV. ""We welcome the PrimeStar management and employees to the DirecTV family,"" commented Hartenstein. ""PrimeStar employees have built a successful business, and they now play an integral role in transitioning PrimeStar subscribers to DirecTV and ensuring the continued growth of our industry.""Hughes announced in January 1999 an agreement with PrimeStar to acquire its medium-power DBS business and related Tempo transaction in March when it acquired the Tempo I satellite. The second phase of the transaction - the acquisition of the in-orbit Temple II satellite and 11 frequencies at the 119 degrees West Longitude orbit slot - remains subject to Federal Communications (FCC) approval. DirecTV will introduce new programming services from the in-orbit Tempo satellite upon completion of the transaction. FCC approval of the Tempo transaction is expected by mid-year.