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Dish Network has announced its merger with satellite operator EchoStar in an all-stock deal, creating a combined company worth approximately billion. The aim of the merger is to reunite billionaire Charlie Ergen’s telecom empire and strengthen their position against larger US carriers such as AT&T and Verizon Communications, which have been fierce competitors for Dish.

Following its spinoff from EchoStar in 2008, Dish has been expanding beyond satellite TV into streaming TV and mobile telecom services. However, it has faced strong competition from larger rivals. By combining Dish’s pay-TV business and its 5G network with EchoStar’s satellite infrastructure serving retail, business, and government clients, Dish hopes to boost its cash flow and reduce its near-term capex needs.

The main benefit for Dish in this transaction is access to EchoStar’s .7 billion cash, which will improve Dish’s liquidity and leverage. EchoStar shareholders will receive 2.85 Dish Network Class A shares, representing a 12.9% premium to EchoStar’s closing price before the reports of the merger.

Following the completion of the deal, expected by the end of the year, Charlie Ergen, the co-founder of Dish, will serve as the executive chairman of the combined company. Hamid Akhavan, the CEO of EchoStar, will lead the company as its CEO.

Dish shareholders will hold approximately 69% of the combined company, while EchoStar shareholders will hold the remaining stake. Dish and EchoStar also reported second-quarter revenue that exceeded analysts’ estimates.

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