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Dish Networks and EchoStar have announced their decision to merge, bringing together their expertise in satellite communications, streaming services, and a nationwide 5G network. This marks a reunion for the two companies, as EchoStar was spun off from Dish as a standalone company in 2008.

In recent years, Dish has shifted its focus from satellite pay-TV to telecom, in response to the rise of cord-cutting and increased competition. In 2020, Dish acquired Boost, a prepaid mobile brand, along with its wireless spectrum, to create a fourth national carrier after the merger of Sprint and T-Mobile. Furthermore, Dish’s chairman, Charles Ergen, has expressed interest in merging with rival DirecTV, although previous attempts were blocked by regulators.

The merger is expected to close by the end of the year and will result in cost and revenue synergies. The combined company will be headquartered in Englewood, Colorado and will include various consumer and business brands such as Dish Wireless, Boost Wireless, Sling TV, Dish TV, EchoStar, Hughes, and Jupiter satellite services, HughesON managed services, and HughesNet satellite internet.

Ergen stated that the merger is a strategically and financially compelling combination that focuses on long-term growth and building a sustainable business. He emphasized the substantial investments Dish has made in spectrum and its wireless network buildout, which will reduce near-term capital expenditure requirements. The combined company’s asset portfolio, enhanced free cash flow generation capability, and strengthened capital structure are expected to drive long-term value creation for shareholders and other stakeholders.

Dish’s 5G wireless network currently covers over 70% of the US, while EchoStar’s Jupiter 3 satellite provides significant available capacity for terrestrial and non-terrestrial services. With this merger, the combined company will have the capability to deliver a wide range of satellite and wireless communication and content distribution services.

Under the terms of the merger, EchoStar stockholders will receive 2.85 common shares of Dish for each share of EchoStar they hold. This represents a premium of 12.9% based on the companies’ closing stock prices on July 5th. Dish Network shareholders will own approximately 69% of the combined company, while EchoStar shareholders will own 31%.

EchoStar CEO Hamid Akhavan will be in charge of the combined company, with Dish Network’s CEO Erik Carlson exiting the company. Ergen will assume the role of executive chairman, and Dish Wireless’s COO, John Swieringa, will become the COO of the merged entity. The board of directors will consist of seven Dish directors, three EchoStar independent directors, and Akhavan.

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