What's Going On With Dish Stock Tuesday?

EchoStar Corp SATS agreed to merge with DISH Network Corp DISH to build a nationwide wireless network in an all-stock merger at a fixed exchange ratio.

EchoStar stockholders will receive 2.85 shares of DISH Network Class A common stock for each share of EchoStar Class A, Class C, or Class D common stock and 2.85 shares of DISH Network Class B common stock for each share of EchoStar Corporation Class B common stock.

The exchange ratio represents a premium of 12.9% to EchoStar stockholders as implied by the unaffected 30-day volume weighted average closing stock prices of the two companies on July 5.

The existing DISH Network shareholders will own approximately 69%, and existing EchoStar shareholders will own about 31% of the combined company's common stock. 

The transaction combines DISH Network's satellite technology, streaming services, and nationwide 5G network with EchoStar's premier satellite communications solutions, creating a global leader in terrestrial and non-terrestrial wireless connectivity.

Charles Ergen, Chairman of the Board of both DISH Network and EchoStar, said, "DISH's substantial past investments in spectrum and its wireless buildout, combined with EchoStar's recent launch of JUPITER 3, are expected to significantly reduce near-term CAPEX requirements."

The combined company will be headquartered in Englewood, Colorado. 

Hamid Akhavan will be the CEO of the combined company, and Charles Ergen will serve as Executive Chairman. John Swieringa, COO of DISH Wireless, will be Technology & Chief Operating Officer. 

Erik Carlson will continue to serve as DISH Network's CEO until the transaction's closing.

EchoStar CEO expects $150 million of EBITDA synergies annually from the deal.

Also on Tuesday, Dish reported second-quarter revenue of $3.91 billion, marginally beating the consensus of $3.90 billion. EPS of $0.31 beat the consensus of $0.29.

Net pay-TV subscribers decreased by approximately 294,000 in the second quarter, compared to 257,000 in the year-ago quarter.

The company closed the quarter with 8.90 million pay-TV subscribers.

Retail wireless net subscribers decreased by approximately 188,000 in the second quarter, compared to a net decrease of 210,000 in the year-ago quarter.

Dish closed the quarter with 7.73 million retail wireless subscribers.

Price Action: DISH shares are trading higher by 9.55% at $8.37 on the last check Tuesday.