EL SEGUNDO, Calif. and NEW DELHI, India--June 8, 2004--Hughes Network Systems, Inc., a wholly-owned subsidiary of The DIRECTV Group, Inc. (NYSE: DTV), has entered into definitive agreements to sell its holding of 54.96% (18,667,491 shares) in Hughes Software Systems Limited ("HSS") to Flextronics International Ltd. ("Flextronics"). The transaction was consummated at a price of Rs. 547 per share and Flextronics will make an open offer for an additional 20% of the outstanding share capital pursuant to applicable Indian laws. The DIRECTV Group's equity stake in HSS has been valued at approximately U.S. $226 million, making this transaction one of the largest cross border M&A deals in India, particularly in the information technology sector. DSP Merrill Lynch acted as the exclusive financial advisor to The DIRECTV Group.
HSS, a DIRECTV Group subsidiary based in India, is a leader in global telecommunication software outsourcing. HSS serves about 100 customers worldwide, in the Telecom Infrastructure, Communication Service Provider, and Business Process Outsourcing sectors. HSS, India's leading communication software services provider, offers convergent solutions to global telecom infrastructure providers through its outsourcing services and products for Fixed and Mobile networks for Voice and Data. Commended as one of the Best Employers in India, HSS has centers at Gurgaon and Bangalore, India and Nuremberg Germany and sales and support operations in 10 international locations and has 2,400 employees worldwide.
Headquartered in Singapore, Flextronics is the leading Electronics Manufacturing Services ("EMS") provider focused on delivering operational services to technology companies. With fiscal year 2004 revenues of US $14.5 billion, Flextronics is a major global company with design, engineering, manufacturing and logistics operations in 29 countries and five continents. This global presence allows for manufacturing excellence through a network of facilities situated in key markets and geographies that provide its customers with the resources, technology and capacity to optimize their operations. Flextronics' ability to provide end-to-end operational services that include innovative product design, test solutions, manufacturing, IT expertise, network services, and logistics has established the Company as the world's leading EMS provider.
The DIRECTV Group (formerly Hughes Electronics Corporation) through Hughes Network Systems Inc. and its indirect wholly-owned subsidiary HNS Mauritius Holdings, owns a controlling interest in HSS. The News Corporation Limited ("News Corp") acquired 34% ownership of The DIRECTV Group last December. As part of that transaction, NewsCorp and other persons acting in concert made an open offer for 20% of the outstanding share capital as required under SEBI regulations.
Pradman Kaul, chairman and CEO of Hughes Network Systems said, "While HSS is a high-quality asset run by a strong management team, it is not a part of The DIRECTV Group's core business operations." He added, "By leveraging the resources and expertise of both HSS and Flextronics, we believe this transaction will enable HSS to further develop and more quickly expand its product offerings."
Calling this a landmark M&A transaction, Hemendra Kothari, Chairman, DSP Merrill Lynch, said," This transaction demonstrates strong interest of leading global players like Flextronics in building India-centric operations."
The DIRECTV Group, Inc. is a world-leading provider of digital multichannel television entertainment, broadband satellite networks and services, and global video and data broadcasting. The DIRECTV Group, Inc. is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by News Corporation Ltd.
CONTACT: The DIRECTV Group, Inc. Bob Marsocci, 310-964-4656 or DSP Merrill Lynch Mona Kwatra, +91-22-5632-8513 SOURCE: The DIRECTV Group, Inc.