Creates a Global Connectivity Leader with Premier Wireless, Satellite and Video Distribution Capabilities
Expected to Generate Significant Cost and Revenue Synergies
Strong Asset Base and Enhanced Free Cash Flow Generation Position Combined Company for Growth and Value Creation
DISH Network Corporation (Nasdaq: DISH) and EchoStar Corporation (Nasdaq: SATS) have announced they have entered into a definitive agreement for DISH Network to combine with EchoStar Corporation in an all-stock merger at a fixed exchange ratio. The transaction was negotiated and recommended by Special Committees of Independent Directors of both companies and unanimously approved by the Boards of Directors of both companies.
Upon closing of the transaction, EchoStar Corporation stockholders will 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 and 2.85 shares of DISH Network Class B common stock for each share of EchoStar Corporation Class B common stock they own. The exchange ratio represents a premium of 12.9% to EchoStar stockholders as implied by the unaffected 30-day volume weighted average closing stock prices of the two companies on July 5, 2023, the last full trading day prior to media speculation regarding a potential transaction.
The transaction combines DISH Network's satellite technology, streaming services and nationwide 5G network with EchoStar's premier satellite communications solutions, creating a global leader in terrestrial and non-terrestrial wireless connectivity. Both companies have strong momentum, highlighted by DISH's 5G wireless network that now covers more than 70 percent of the U.S. with full commercialization underway and the successful launch of EchoStar's JUPITER 3 satellite with significant available capacity for converged terrestrial and non-terrestrial services. The combined company will be well-positioned to deliver a broad set of communication and content distribution capabilities, accelerating the delivery of satellite and wireless connectivity solutions desired by customers.
"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."
The combined company will be headquartered in Englewood, Colorado. It will go to market worldwide under a suite of proven consumer and business brands, including DISH Wireless, Boost Wireless, Sling TV and DISH TV, as well as EchoStar, Hughes® and JUPITER™ satellite services, HughesON™ managed services and HughesNet® satellite internet.
Hamid Akhavan will serve as President and Chief Executive Officer of the combined company upon closing of the transaction and Charles Ergen will serve as Executive Chairman. John Swieringa, President & COO of DISH Wireless, will be President, Technology & Chief Operating Officer of the combined company. Erik Carlson will continue to serve as President and Chief Executive Officer of DISH Network until closing of the transaction, at which time he will depart the business.
The Board of Directors will consist of 11 members: Seven DISH directors, three EchoStar independent directors, and Hamid Akhavan.
Following completion of the merger, existing DISH Network shareholders will own approximately 69% and existing EchoStar Corporation shareholders will own approximately 31% of the common stock of the combined company. The majority shareholder group has agreed generally not to vote DISH Class A shares owned by the majority shareholder group upon closing of the merger for three years, the intention of which is to ensure that, as a result of the merger, the group's voting power in DISH Network will not increase relative to current levels at DISH.
The transaction is subject to approval by a majority of the combined voting power of the outstanding shares of EchoStar Corporation common stock. DISH Network's issuance of its common stock in the transaction is subject to approval by a majority of the combined voting power of the votes cast by holders of DISH Network common stock. The majority shareholder group, which currently has approximately 90% and 93% of the combined voting power of DISH Network and EchoStar Corporation, respectively, has approved adoption of the merger agreement and the issuance of DISH Network common stock required for the transaction via written consent. No further action by DISH Network or EchoStar Corporation stockholders is required to approve the transaction.
The transaction, which is also subject to regulatory approvals and customary closing conditions, is expected to be completed by year-end.
Evercore is serving as exclusive financial advisor, and Cravath, Swaine & Moore LLP is serving as legal counsel to the Special Committee of the Board of Directors of EchoStar Corporation. White & Case LLP is serving as legal counsel to EchoStar Corporation.
J.P. Morgan is serving as exclusive financial advisor, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to the Special Committee of the Board of Directors of DISH Network. Sullivan & Cromwell LLP is serving as legal counsel to DISH Network.
About DISH Network Corporation
DISH Network Corporation is a connectivity company. Since 1980, it has served as a disruptive force, driving innovation and value on behalf of consumers. Through its subsidiaries, the company provides television entertainment and award-winning technology to millions of customers with its satellite DISH TV and streaming SLING TV services. In 2020, the company became a nationwide U.S. wireless carrier through the acquisition of Boost Mobile. DISH continues to innovate in wireless, building the nation's first virtualized, O-RAN 5G broadband network. DISH Network Corporation (NASDAQ: DISH) is a Fortune 200 company.
EchoStar Corporation (Nasdaq: SATS) is a premier technology and networking services provider offering consumer, enterprise, operator and government solutions worldwide under its Hughes®, HughesNet® and EchoStar® brands. In Europe, EchoStar operates under its EchoStar Mobile Limited subsidiary and in Australia, the company operates as EchoStar Global Australia.
For more information, visit www.echostar.com