DETROIT — General Motors Corp. on Sunday agreed to sell its Hughes Electronics subsidiary and its DirecTV home satellite network to EchoStar Communications for $25.8 billion, the automaker said.

        GM's board of directors decided to sell to EchoStar after News Corp. dropped out of the bidding Saturday. If approved by regulators, EchoStar's purchase would make the home satellite business in the United States a near monopoly.

        Under terms of the deal announced in a news release, GM would technically spin off Hughes and merge it with EchoStar in a tax-free transaction.

        An EchoStar representatives was not immediately available for comment.

        The new company would be called EchoStar but would market its service under the DirecTV name. GM shareholders still have to approve the deal, which GM said it expects to close in late 2002.

        EchoStar, of Littleton, Colo., is offering 0.73 EchoStar shares for each share of Hughes. Based on EchoStar's closing stock price Friday of $25.26, the deal values each share of Hughes at $18.44 — a 20 percent premium to Hughes's closing share price of $15.35.

        News Corp. chairman Rupert Murdoch withdrew his company's long-standing offer Saturday after GM's board failed to reach a decision on the sale.

        The two companies had been in negotiations for more than 18 months, and Murdoch sorely wanted to make Hughes Electronics, and especially its DirecTV home satellite unit, part of his international media empire.

        “Hughes would have been an excellent strategic fit for our global platforms, and we are disappointed with the board's inaction in the face of an as-yet unfinanced counter proposal,” Murdoch said in a statement.

        EchoStar entered the picture this summer with a proposed stock swap and assumption of almost $2 billion in debt for Hughes and its DirecTV division, which has 10 million subscribers. EchoStar also had guaranteed GM a $500 million breakup consideration if regulators reject the deal.

        EchoStar operates Dish Network, a distant number two among satellite television providers with 6.7 million subscribers. A merger of the two services would give the company a stronghold on the home satellite television business in the United States.

        While it was still in the hunt for Hughes, News Corp. noted that regulators are sure to scrutinize any deal with EchoStar to ensure competition remains in the satellite television market.

        Last week, the president of the National Consumers League wrote a letter the Federal Trade Commission and the U.S. Justice Department asking both agencies to look into the possible implications of an EchoStar takeover of DirecTV.

        “This would almost certainly lead to reduced competition, higher prices and poorer service for millions of consumers,” wrote National Consumers League president Linda Golodner.

        A GM spokeswoman had said the automaker's board would consider regulatory issues in making its decision.

        GM was anxious to sell off Hughes in order to focus more fully on its core automotive business.

        Despite its market-leading position with DirecTV, Hughes lost $227.2 million in the third quarter and $481.6 million through the first nine months of the year. The company announced plans in August to lay off 10 percent of its 7,900 workers.

        Last May, Hughes chairman Michael Smith abruptly resigned and was replaced by GM vice chairman Harry Pearce. The move was seen by industry analysts as a move to bring negotiations with News Corp. to fruition after months of fits and starts.

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