US satellite TV provider DISH Network plans to merge with its sister company and satellite operator, EchoStar, the companies have announced.
The deal will see the creation of a significant space connectivity player with a market value of around US$6 billion at the time of the announcement, according to Reuters. DISH Network’s satellite technology, streaming services and 5G network will be brought together with EchoStar’s satellite communications. If the all-stock merger proceeds, DISH shareholders will own 69% of the new group while EchoStar investors will hold the remainder.
DISH was originally founded in 1995, as part of the EchoStar Corporation – both of which were formed by Charlie Ergen. Courtesy: DISH Network.
The companies already share history, with billionaire Charlie Ergen sitting in the position of executive chairman at both. In addition to holding 90% of the voting power of DISH, which he co-founded, Ergen owns just over half of the company’s shares and nearly 60% of Echostar.
In fact, when DISH was founded in 1995, it was already part of the EchoStar Corporation, also owned by Ergen. In 2008 the company was spun off from the EchoStar business to become an independent satellite services provider, leaving EchoStar with most of the satellite management and equipment production responsibilities.
“This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business,” said Ergen in an official statement on the merger. He added: “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.”
The merger, which is expected to close by the end of the year, will, unsurprisingly, see Ergen serve as executive chairman of the new group, marking the exit for DISH network’s chief executive officer Erik Carlson.
