On May 20, EchoStar Corporation (EchoStar) and DISH Network Corporation (DISH) announced an agreement whereby DISH will purchase from EchoStar the portion of EchoStar’s Satellite Services Division that manages and provides broadcast satellite services primarily to DISH (the BSS Business), including nine satellites, for roughly 22.9m shares of DISH stock valued, in the aggregate, at $797m. For EchoStar, the divestiture will enable a strategic reorientation – away from the broadcast satellite services sector and towards the high-growth Internet connectivity business. Under pressure from industry-wide lower capacity pricing, along with other business development challenges, revenues from EchoStar’s Satellite Services Division shrank by 10% to $358m in 2018. For DISH, the acquisition will result in meaningful vertical integration – approximately 90% of the BSS Business’ revenues are derived from contracts with DISH – by combining broadcast satellite operations, assets and personnel with the company’s core satellite-based pay-TV business. Subject to customary conditions, including regulatory approvals, the transaction is expected to close in the second half of 2019.
