Dish Network and EchoStar unveiled plans for an all-stock merger on Tuesday. The merger, recommended by Special Committees of Independent Directors and unanimously approved by the Board of Directors of both companies, will see Dish Network and EchoStar combining forces creating a global leader in terrestrial and non-terrestrial wireless connectivity.
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Synergy of Connectivity Technologies
According to the joint statement, this transaction combines Dish Network's satellite technology, streaming services, and expansive nationwide 5G network (which covers over 70 percent of the US) with EchoStar's satellite communications solutions, including the newly launched Jupiter 3.
The newly merged company will have the advantage of offering a wide range of communication and content distribution services, accelerating the delivery of satellite and wireless connectivity solutions desired by customers.
Shareholder Benefits
Under the terms of the agreement, EchoStar Corporation stockholders are set to receive 2.85 shares of Dish Network Class A common stock for each share of EchoStar Corporation Class A, Class C, or Class D common stock. Likewise, for each share of EchoStar Corporation Class B common stock, shareholders will receive 2.85 shares of Dish Network Class B common stock.
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This exchange ratio reflects a premium of 12.9 percent for EchoStar stockholders based on the unaffected 30-day volume weighted average closing stock prices of both companies as of July 5, 2023 - the final trading day preceding media speculation regarding the merger.
Reduction of Capital Expenditures
"This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business," said Both Dish Network and EchoStar. "Dish's substantial past investments in spectrum and its wireless buildout, combined with EchoStar's recent launch of Jupiter 3, are expected to significantly reduce near-term CAPEX requirements."
EchoStar emphasized that the amalgamation of Dish and EchoStar would create a "broad suite of robust connectivity services, using a superior portfolio of technology, spectrum, engineering, manufacturing, and network management expertise."
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Broad Consumer and Business Brand Portfolio
The joint entity will be headquartered in Englewood, Colorado, and will harness a spectrum of well-established consumer and business brands to penetrate global markets. Brands like Dish Wireless, Boost Wireless, Sling TV, Dish TV, EchoStar, Hughes, and Jupiter satellite services, HughesON managed services, and HughesNet satellite internet are all set to play pivotal roles in the new conglomerate's market outreach.
