Today DISH Network announced a deal to merge with its sister company EchoStar. DISH, the parent company of Sling TV has been struggling for cash for some time now and is hoping this deal could help it complete its 5G buildout. This deal will be an all-stock merger.
“This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business,” said Charles Ergen, Chairman of the Board of 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. The transaction is expected to generate significant cost and revenue synergies, and the strong asset portfolio of the combined company paired with its enhanced free cash flow generation capability and strengthened capital structure are expected to drive long-term value creation for our shareholders and other stakeholders.”
“From unconnected individuals in the most rural and remote regions of the world to the constantly evolving networks of private enterprises and government institutions, the connectivity landscape is rapidly changing,” said Hamid Akhavan, President and Chief Executive Officer of EchoStar. “As a combined company, we will offer a broad suite of robust connectivity services, using a superior portfolio of technology, spectrum, engineering, manufacturing and network management expertise. DISH shares our customer-first culture, and together we will be well positioned to further scale and accelerate our strategy.”
“The combination of DISH and EchoStar brings together two trailblazers with complementary portfolios and a shared commitment to change the way the world communicates,” said Erik Carlson, President and Chief Executive Officer, DISH Network. “DISH is transforming America’s wireless infrastructure with its 5G technology. With EchoStar’s engineering capabilities, managed network services delivery and worldwide S-band spectrum rights, the combined company will have greater resources and the financial flexibility to deliver connectivity to consumers, enterprises and governments around the world.”
This move in the end, brings the two companies back together. In 2008 EchoStar Communications was renamed to DISH Network, and EchoStar Corp was spun off into its own technology company.
Now as DISH moves to become a wireless phone company to compete with AT&T, T-Mobile, and Verizon, merging the companies could help it do just that. DISH reportedly needs $3 billion to meet a 2025 deadline from the FCC to offer service to 75% of Americans.
This merger between the two companies could help DISH raise the capital it needs to finish its wireless phone plans as it deals with the growth of cord cutting.
For consumers, this deal will likely mean little for now. In the long run, it could help DISH become the wireless phone competitor to take on the big three that currently dominate wireless service.