SATS - EchoStar stock dips on all-stock merger deal with Dish

2023-08-08 10:08:18 ET

Dish Network ( NASDAQ: DISH ) and EchoStar ( NASDAQ: SATS ) are merging in an all-stock transaction.

After the merger is completed, existing Dish shareholders will own about 69% of the common stock of the combined company, while existing EchoStar stockholders will own the remaining ~31%.

EchoStar stockholders will get 2.85 shares of Dish Cass A common stock for each share of EchoStar's Class A, Class C or Class D common stock and 2.85 shares of Dish Class B common stock for each EchoStar Class B common stock they own.

The exchange ratio represents a premium of 12.9% to EchoStar stockholders as implied by 30-day weighted average closing stock prices of the two companies on July 5, the last full trading day prior to media speculation regarding the potential deal, according to the companies.

The transaction combines Dish's satellite technology, streaming services and nationwide 5G network with EchoStar's satellite communications solutions.

"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," said Charles Ergen, Chairman of both Dish and EchoStar.

The combined company will be headquartered in Englewood, Colorado.

EchoStar's President and CEO Hamid Akhavan will take up these same roles in the combined company and will also be a board member.

Dish's current President and CEO Erik Carlson will leave the company after the transaction is completed.

Ergen will serve as executive chairman; while John Swieringa, president and COO of Dish Wireless, will be President, Technology and COO of the combined company.

The company's board will consist of 11 members — seven Dish directors, three EchoStar independent directors, and Akhavan.

The deal was approved by the boards of both companies.

The majority shareholder group, which currently has ~90% and 93% of the combined voting power of Dish and EchoStar, respectively, has approved the merger agreement.

The transaction, which is also subject to regulatory approvals, is expected to be completed by th end of the year.

DISH stock has risen ~3% , while SATS has dipped ~4% as of 10?a.m. ET.

More on Dish and EchoStar

• DISH Network Stock: Don't Buy On The Amazon Rumors, It's A Value Trap
• EchoStar: Includes Catalysts For An Upside

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