NEW YORK -- General Motors on Wednesday said it will split off Hughes Electronics Corp., and sell its stake in Hughes to News Corp. in a $3.8 billion deal.
Under the deal GM will receive about $3.1 billion in cash, and the remainder would be paid in News Corp. preferred American Depositary Receipts. News Corp. will purchase GM's 19.9 percent stake in Hughes, which will give media Mogul Rupert Murdoch's company control of DirecTV. Murdoch has long sought a foothold in the U.S. satellite television market.
News Corp. said it would pay about $14 per Hughes share -- a 22 percent premium over Hughes' $11.48 closing price on Wednesday -- and offer to buy another 14 percent for the same price from the company's public shareholders.
The automaker also will receive a special $275 million "value creation" dividend for converting the Hughes tracking stock to an asset-based stock upon the deal's completion.
"We had an idea of what was fair value for Hughes and we have a transaction here that we think achieved that," said Rick Wagoner, GM's chief executive, who saw a previous deal to sell Hughes to EchoStar scuttled by regulatory opposition.