EchoStar Corp (SATS) shares experienced a significant decline on Monday following the announcement that DirecTV will acquire its video distribution business. This strategic move allows EchoStar to refocus on its expanding 5G Open RAN network, offering more choices and driving innovation in the U.S. wireless market.
The agreement between EchoStar and DirecTV includes the acquisition of DISH TV and Sling TV, along with other assets related to video distribution. In exchange, EchoStar will receive a nominal consideration of $1 plus the assumption of Dish DBS net debt. The transaction is expected to close in the fourth quarter of 2025.
Hamid Akhavan, President and CEO of EchoStar, highlighted the benefits of this agreement for various stakeholders. He emphasized that the improved financial profile will allow EchoStar to enhance and deploy its nationwide 5G Open RAN wireless network. This move will provide U.S. wireless consumers with more choices and accelerate innovation in the industry. Additionally, Akhavan anticipates that both Dish and EchoStar bondholders will benefit from the stronger financial profiles and sustainable capital structures of the two companies.
The combined offerings from DirecTV and EchoStar are anticipated to provide consumers with more choices and improved value. The newly formed video company will be able to deliver packages at lower prices, consolidate multiple content sources in one place, enhance its services through increased investment, and realize efficiencies through shared infrastructure.
The transaction is also expected to benefit U.S. wireless consumers by allowing EchoStar to dedicate its resources to enhancing and further deploying its 5G Open RAN cloud-native wireless network. This network is designed to offer a more open and flexible approach to wireless infrastructure, potentially leading to greater innovation and competition.
In addition to the transaction with DirecTV, EchoStar announced that TPG Angelo Gordon and co-investors have provided $2.5 billion in financing. This financing will allow EchoStar to provide holders of Dish convertible notes with the opportunity to exchange their notes for new secured notes and secured convertible notes maturing in 2030. Furthermore, certain members of the Dish supporting investors and a related party of chairman Charles Ergen have entered into a commitment agreement, through which EchoStar will issue $5.1 billion of new senior secured notes maturing in 2029 for cash. This new money financing will provide EchoStar with substantial capital for the buildout of its Boost Mobile nationwide 5G Open RAN network.
Akhavan expressed confidence in EchoStar’s future, stating, “With an improved financial profile and a unique approach, we expect to gain share, drive shareholder value, and provide more options for U.S. wireless consumers. Our collaboration with our existing stakeholders to achieve this holistic recapitalization solution at EchoStar is a testament to their continued support of our vision, and we greatly appreciate their partnership and continued investment in our mission.”
EchoStar’s shares were down 15.2% at $23.84 at the time of publication on Monday, per Benzinga Pro.
