Billionaire Charlie Ergen on Tuesday announced his plans to merge his satellite and broadband services companies Dish Network and EchoStar in an all-stock deal, according to CNBC.
“This is a strategically and financially compelling combination that is all about growth and building a long-term sustainable business,” Ergen, chairman of both Dish and EchoStar, said in a statement.
By Monday's end, FactSet reported that EchoStar had maintained a market value of about $2 billion while Dish's market value was a little over $4 billion. Due to Ergen's 2008 separation of EchoStar from Dish, the two companies that had been apart for over 15 years are now back together.
For each share of EchoStar stock, 2.85 shares of Dish common stock will be exchanged, representing a 12.9% premium for EchoStar shareholders as of the close of the market on July 5.
The firms underlined that was "the last full trading day prior to media speculation regarding a potential transaction," Semafor having reported on July 6 that a potential merger was being considered.
Hamid Akhavan, the current CEO of EchoStar, will remain as the combined company's president and CEO, while Erik Carlson, Dish's current president and CEO, is expected to resign after the deal is completed.
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