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DISH buying EchoStar's broadcast satellite service business in all-stock deal

DISH Network Corp. agreed a deal to acquire EchoStar Corp.'s broadcast satellite service division in a tax-free, all-stock deal valued at about $800 million.

Under the deal, EchoStar will transfer operations and other assets that comprise the company's broadcast satellite service business, including nine direct broadcast satellites, licensing for the 61.5-degree orbital slot, and select real estate properties to DISH in exchange for about 22,937,188 shares of DISH stock that will be distributed to EchoStar shareholders.

DBS spacecraft involved in the transaction will include EchoStar VII, EchoStar X, EchoStar XI, EchoStar XII, EchoStar XIV, EchoStar XVI, EchoStar XXIII, Nimiq 5 and QuetzSat-1. The broadcast satellite service business also includes DISH Mexico S de RL de CV.

Immediately following the distribution, a subsidiary of DISH will merge with and into such entity and each EchoStar stockholder as of the distribution record date will receive a number of shares of DISH class A common stock equal to 22,937,188 divided by the total number of shares of EchoStar class A and class B common stock outstanding on the distribution record date.

The transaction is expected to close in the second half of 2019, subject to satisfaction or waiver of closing conditions.

Bank of America Merrill Lynch acted as financial adviser to DISH in the transaction, while Sullivan & Cromwell LLP acted as a legal counsel for DISH. Deutsche Bank Securities Inc. acted as financial adviser to EchoStar in the transaction. White & Case LLP acted as legal counsel for EchoStar in the transaction.

It follows DISH's 2017 acquisition of certain assets and operations of EchoStar, including a 10% stake in over-the-top service Sling TV.