Filed by General Motors Corporation
Subject Company - General Motors Corporation
and Hughes Electronics Corporation
and EchoStar Communications Corporation
Pursuant to Rule 425 under the Securities Act of 1933
and Deemed Filed Pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Commission File No.: 333-84472
[ECHOSTAR LOGO] [HUGHES LOGO]
ON OCTOBER 28, 2001, ECHOSTAR COMMUNICATIONS ANNOUNCED DEFINITIVE AGREEMENTS FOR
A MERGER WITH HUGHES ELECTRONICS. THE COMBINED COMPANY WILL BE NAMED ECHOSTAR
AND USE THE DIRECTV BRAND FOR ITS DIRECT BROADCAST SATELLITE (DBS) SERVICE. THE
NEW COMPANY WILL OFFER LOCAL BROADCAST CHANNELS, COMPETITIVELY PRICED BROADBAND
SERVICE AND NATIONWIDE PRICING TO EVERY HOME IN AMERICA. THE MERGER WILL ALSO
BRING REAL COMPETITION TO THE PAY TELEVISION MARKET, WHERE ENTRENCHED CABLE
COMPANIES NOW CONTROL ALMOST 80 PERCENT OF AMERICAN TV HOUSEHOLDS.
LOCAL CHANNELS FOR ALL AMERICANS
Neither EchoStar nor DIRECTV alone has sufficient spectrum or the
satellite resources necessary to provide local broadcast channels in
all 210 television designated market areas ("DMAs"). Today, the
companies each provide mainly redundant service to fewer than 50 of
America's largest television DMAs, leaving many residents of smaller
cities and rural towns without access to local news, weather and
sports via satellite.
As a result of the merger, the new EchoStar will have the satellite
and spectrum resources necessary to provide local broadcast
programming to DBS customers in all 210 American DMAs, including full
compliance with "must-carry" requirements. This enhanced offering
will bolster competition with cable in the DMAs where satellite
cannot currently offer local channel service.
AFFORDABLE BROADBAND FOR EVERY AMERICAN HOME, SCHOOL AND BUSINESS
Today, millions of Americans - many in rural areas - have little or
no access to high-speed Internet service. DSL providers, phone
companies and cable operators have not made the investments to
connect rural homes, schools and businesses, and these disadvantaged
American households find themselves on the losing side of the
"digital divide."
The merger will bring competitively priced broadband services to
every American home, school and business. The very nature of
satellite technology and the economies of scale created by the merger
will allow the merged company to bring broadband to locations not
served by cable modem or DSL providers. Without the merger, however,
40 million American households will continue to have little or no
access to broadband service.
ONE NATION, ONE RATE CARD
Today, both EchoStar and DIRECTV offer DBS services at nationwide
prices, a policy that makes the most business sense for national
programming distributors because it simplifies advertising, billing
and customer service activities. Consequently, customers in the most
remote areas of the country pay the same rates for the same services
as those living in the nation's largest cities, extending the
benefits of competition with cable to everyone. EchoStar's Chairman,
who will be the Chairman of the merged company, has committed under
oath to continue this national pricing system after the merger.
In connection with the proposed transactions, General Motors Corporation ("GM"),
HEC Holdings, Inc. ("Hughes Holdings") and EchoStar Communications Corporation
("EchoStar") have filed amended preliminary materials with the Securities and
Exchange Commission ("SEC"), including a Registration Statement of Hughes
Holdings on Form S-4 that contains a consent solicitation statement/information
statement/prospectus. These materials are not yet final and will be further
amended. Holders of GM $1-2/3 and GM Class H common stock are urged to read the
definitive versions of these materials, as well as any other relevant documents
filed or that will be filed with the SEC, as they become available, because
these documents contain or will contain important information. The preliminary
materials, the definitive versions of these materials and other relevant
materials (when they become available), and any other documents filed by GM,
Hughes Electronics Corporation ("Hughes"), Hughes Holdings or EchoStar with the
SEC may be obtained for free at the SEC's website, www.sec.gov, and GM
stockholders will receive information at an appropriate time on how to obtain
transaction-related documents for free from GM.
GM and its directors and executive officers, Hughes and certain of its officers,
and EchoStar and certain of its executive officers may be deemed to be
participants in GM's solicitation of consents from the holders of GM $1-2/3
common stock and GM Class H common stock in connection with the proposed
transactions. Information regarding the participants and their interests in the
solicitation was filed pursuant to Rule 425 with the SEC by EchoStar on November
1, 2001 and by each of GM and Hughes on November 16, 2001. Investors may obtain
additional information regarding the interests of the participants by reading
the amended preliminary consent solicitation statement/information
statement/prospectus filed with the SEC and the definitive consent solicitation
statement/information statement/prospectus when it becomes available.
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended.
Materials included in this document contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause our actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. The factors that could cause actual results of GM,
EchoStar, Hughes, or a combined EchoStar and Hughes, to differ materially, many
of which are beyond the control of EchoStar, Hughes, Hughes Holdings or GM
include, but are not limited to, the following: (1) the businesses of EchoStar
and Hughes may not be integrated successfully or such integration may be more
difficult, time-consuming or costly than expected; (2) expected benefits and
synergies from the combination may not be realized within the expected time
frame or at all; (3) revenues following the transaction may be lower than
expected; (4) operating costs, customer loss and business disruption including,
without limitation, difficulties in maintaining relationships with employees,
customers, clients or suppliers, may be greater than expected following the
transaction; (5) generating the incremental growth in the subscriber base of the
combined company may be more costly or difficult than expected; (6) the
regulatory approvals required for the transaction may not be obtained on the
terms expected or on the anticipated schedule; (7) the effects of legislative
and regulatory changes; (8) an inability to obtain certain retransmission
consents; (9) an inability to retain necessary authorizations from the FCC; (10)
an increase in competition from cable as a result of digital cable or otherwise,
direct broadcast satellite, other satellite system operators, and other
providers of subscription television services; (11) the introduction of new
technologies and competitors into the subscription television business; (12)
changes in labor, programming, equipment and capital costs; (13) future
acquisitions, strategic partnership and divestitures; (14) general business and
economic conditions; and (15) other risks described from time to time in
periodic reports filed by EchoStar, Hughes or GM with the Securities and
Exchange Commission. You are urged to consider statements that include the words
"may," "will," "would," "could," "should," "believes," "estimates," "projects,"
"potential," "expects," "plans," "anticipates," "intends," "continues,"
"forecast," "designed," "goal," or the negative of those words or other
comparable words to be uncertain and forward-looking. This cautionary statement
applies to all forward-looking statements included in this document.
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