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Dish Network has announced its plans to merge with satellite operator EchoStar, in an effort to create a billion telecom company. The merger aims to reunite billionaire Charlie Ergen’s telecom empire and combat the growing competition from larger U.S. carriers.

Since its separation from EchoStar in 2008, Dish has been looking to expand beyond satellite TV into streaming TV and mobile telecom services. However, it has faced tough competition from bigger rivals such as AT&T and Verizon Communications.

The all-stock deal will combine Dish’s pay-TV business and its 5G network with EchoStar’s satellite infrastructure, which caters to retail, business, and government clients. This move is expected to boost cash flow and reduce near-term capital expenditure needs for both companies.

One significant aspect of the deal is Dish’s access to EchoStar’s .7 billion in cash reserves. This will improve Dish’s liquidity and leverage in the market. The exchange ratio for EchoStar stockholders will be 2.85 Dish Network’s Class A shares, representing a 12.9% premium to EchoStar’s closing price on July 5th.

Charlie Ergen, the co-founder of Dish, currently owns a majority stake in the company and nearly 60% of EchoStar. Once the merger is complete, Ergen will serve as the executive chairman of the combined company, while EchoStar CEO Hamid Akhavan will take on the role of CEO.

The deal is expected to close by the end of the year, and Dish shareholders will own approximately 69% of the new company, with EchoStar shareholders owning the remaining shares.

In addition to the merger announcement, both Dish and EchoStar have also reported second-quarter revenues that surpassed analysts’ average estimates.

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