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HomeAll newsMost read newsBusiness Leaders Biography
Birthday : 06/16/1947
Place of birth : France
Linked companies : Johnson Matthey PLC - Akzo Nobel NV
Biography : Patrick Webster Thomas is a British businessperson who has been the head of 5 different companies an

Dish to Buy EchoStar's Broadcast Satellite-Service Business -- WSJ

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05/21/2019 | 02:48am EDT

By Patrick Thomas

Dish Network Corp. reached a deal to buy EchoStar Corp.'s broadcast satellite-service business for about $800 million in stock, as the company brings in-house operations it split off more than a decade ago.

The Englewood, Colo., satellite-television provider on Monday said the purchase, which includes nine direct broadcast satellites and certain real estate, would create operating efficiencies and improve its free cash flow.

Dish depends on EchoStar to operate the majority of its satellites to deliver TV services to subscribers.

As part of the deal, expected to close in the second half of this year, EchoStar shareholders will receive shares in the unit being sold to Dish. Those shares would then be exchanged for 0.24 Class A shares in Dish, based on the amount of shares outstanding in EchoStar as of last week.

EchoStar shares rose 3.6% in afternoon trading, while Dish shares fell 8%.

EchoStar, which builds satellite technology, said its broadcast satellite-service business provides telemetry, tracking and control services to satellites owned by Dish. The company said that it was having trouble growing the business and that Dish was its only customer.

"This transaction will allow EchoStar to focus our efforts on our high growth business of broadband services and other initiatives," EchoStar Chief Executive Mike Dugan said in a statement.

Dish and EchoStar separated into two public companies in 2008. Dish acquired certain EchoStar assets back in 2017, such as its software development group and uplink business. The deal also gave Dish EchoStar's 10% stake in Sling TV.

Dish CEO Erik Carlson said the latest deal with EchoStar brings key broadcast satellite operations, associated assets and personnel into its fold.

The U.S. pay-TV sector has been shrinking in recent years as price-conscious cord-cutters drop expensive cable and satellite-TV connections in search of other forms of entertainment. Dish offset some of those losses by launching online-only Sling TV in 2015, though growth in this market has also slowed in recent months.

Dish lost 266,000 satellite customers during the three months that ended March 31, while internet-based Sling TV added 7,000 customers, its smallest-ever quarterly gain.

Dish shares traded lower after the open Monday, but extended those declines after Federal Communications Commission Chairman Ajit Pai said he would recommend approving T-Mobile US Inc.'s purchase of Sprint Corp.

Pivotal Research analysts downgraded their outlook for Dish shares because an approval likely pushes back the timing for the company striking a deal to sell its wireless spectrum licenses.

Dish, which is working to develop its own 5G network, has said it has since 2008 invested more than $21 billion to acquire spectrum licenses and make investments in entities.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
DISH NETWORK CORPORATION -2.14% 31.04 Delayed Quote.24.31%
ECHOSTAR CORPORATION 21.73% 39.77 Delayed Quote.8.31%
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