THE News Corporation last night became the largest satellite broadcaster in the US after agreeing to pay $6.6 billion (£4.2 billion) in cash and shares for control of Hughes Electronics, the owner of DirecTV.

The deal ends more than three years of wrangling over control of DirecTV and provides Rupert Murdoch, chairman and chief executive of News Corp, with the final component needed to fulfil his long-held ambition of creating a global satellite broadcasting network.

Under the terms of the deal, News Corp will buy a 19.9 per cent stake in Hughes owned by General Motors (GM) for $3.07 billion in cash, or $14 per share, and 34.3 million News Corp preferred limited voting American Depository Receipts (ADRs) at a value of $22.40 each.

News Corp, parent company of The Times, will buy a further 14.1 per cent of Hughes from other shareholders in exchange for 122.2 million News Corp ADRs.

Mr Murdoch described the acquisition as “a genuinely exciting and transforming deal for News Corp”. The company has already built significant satellite broadcasting operations in the UK, through BSkyB, as well as in Central and South America with Sky Latin America, and across Asia with StarTV.

The US market had been the final frontier in News Corp’s satellite expansion, and the addition of DirecTV’s 11.3 million subscribers will push the company’s total satellite customer base to just under 100 million households.

Mr Murdoch said: “Although this deal has been a long time in the making, the benefits will be felt almost immediately in the competition it will offer cable, the richer services it will provide to American viewers and the value it will create for shareholders of Fox, News Corp and Hughes.”

News Corp first approached GM to buy DirecTV in 2000, but was eventually trumped by a $30 billion bid by EchoStar, a rival US satellite broadcaster.

However, the EchoStar- DirecTV merger was blocked in October last year by the Federal Communications Commission (FCC), the US telecoms regulator. News Corp finally prevailed at its second attempt. Liberty Media, the Denver-based cable group, was seen as another possible bidder, but last month it opted to back News Corp’s bid.

Liberty, whose 18 per cent stake in News Corp makes it the largest shareholder outside the Murdoch family, last month agreed to take an option to buy up to $500 million of News Corp preferred shares over the next six months. If News Corp acquires a stake in Hughes, Liberty will be obliged to exercise the option.

Mr Murdoch described the process of pursuing Hughes as having been “three years of patient negotiations, occasional frustration but ultimately great satisfaction”.

News Corp’s 34 per cent stake in Hughes will be transferred to Fox Entertainment Group, News Corp’s US broadcasting division, in exchange for 74.2 million shares in Fox at $27.99 each and a $4.5 billion promissory note.

Mr Murdoch said: “Fox was created to house News Corp’s American content and distribution assets, and as a television distribution platform. DirecTV obviously fits into that structure.”

The deal remains subject to regulatory and GM shareholder approvals, but Mr Murdoch said News Corp and DirecTV had agreed to adhere to programme access regulations set by the FCC, ensuring that News Corp content is made available to all satellite broadcasters, as well as cable and other competing platforms.

In addition to its stake in DirecTV, Hughes owns 81 per cent of PanAmSat, a provider of satellite broadcasting services that generates more than $800 million a year in sales. It also owns Hughes Network Systems, a supplier of broadband satellite services.

GM plans to spin off Hughes, a tracking stock tied to GM shares, into a new company in which News Corp will be the largest single shareholder. News Corp will assume operating, but not voting, control of Hughes, taking four of the 11 seats on the company board.

Mr Murdoch will become chairman of Hughes, with Chase Carey, News Corp’s former co-chief operating officer, taking the role of chief executive officer. Eddy Hartenstein, Hughes’s corporate senior vice-president, will become vice-chairman of Hughes, reporting to Mr Carey.

The acquisition is the largest undertaken by News Corp since it paid $5.35 billion for Chris-Craft Industries in July 2001.

Analysts estimate that News Corp has available cash of about $4.4 billion, including $1.5 billion raised from a bond issue last week and the expected capital injection from Liberty Media.

The addition of DirecTV is expected to bolster News Corp’s existing stable of broadcasting assets.