Dish Network is reportedly in talks to merge with T-Mobile, according to The Wall Street Journal, though the purchase price and the mix of cash and stock for the deal are yet to be resolved.
The reported deal would combine the country’s second-largest satellite TV operator with its fourth-largest wireless carrier, with a combined market value of around $64 billion.
Einhorn Tells Investors: Tesla Is Gaming S&P 500 Index Committee
The Federal Reserve has poured unprecedented levels of stimulus into the U.S. economy to deal with the pandemic, and most experts agree that inflation is just around the corner. David Einhorn has positioned his Greenlight Capital to benefit from inflation when it arrives. Q2 2020 hedge fund letters, conferences and more SORRY! This content is Read More
Dish, T-Mobile deal could join a wave of tie-ups in telecom
Citing people familiar with the developments, The Wall Street Journal reports that Dish Network and T-Mobile U.S. are in close agreement about what the combined company would look like, with John Legere, T-Mobile U.S.’ president and chief executive officer, taking the top role at the combined company and Dish’s Charlie Ergen as chairman.
However, tougher questions relating to the purchase price and the mix of cash and stock that would be used to pay for the deal remain unresolved. Citing a person familiar with the development, The Wall Street Journal indicates that the talks are at the “formative stage” and that an agreement might not ultimately be hammered out. Striking a cautionary note, the Journal reports that one significant uncertainty to the deal could be Mr. Ergen, who has held talks with companies across the wireless and satellite industries in recent years without completing a major deal.
As reported by ValueWalk, two years ago, Dish bid unsuccessfully for wireless carriers Sprint and Clearwire and has earned a reputation as a deal maker which is tough to get to closing. However, Dish has been amassing licenses to use wireless airwaves for several years, reinforcing its intention to enter the wireless industry.
Industry witnessed over $700 billion in deals during last 3 years
Dish, the country’s second-largest satellite TV operator, lacks the robust broadband internet service that cable companies can lean on to offset a declining TV business. T-Mobile, the fourth-largest wireless carrier, has transformed itself from the weakling of the wireless industry into its fastest-growing carrier. Though Dish has amassed billions of dollars’ worth of wireless licenses, it hasn’t built the cellular network needed to put them to use. T-Mobile’s wireless service would help address this need.
The proposed deal would bring T-Mobile’s estimated 57 million wireless subscribers to Dish, which would enable Dish to fend off gains in video-streaming customers by Netflix, Hulu and Amazon. T-Mobile and Dish had a combined $45 billion in sales and $1.5 billion profit during the past 12 months, according to Bloomberg data.
If the deal gets completed, it would be the latest multi-billion dollar combination in traditional television and communications industries, which are being upended by the internet. The industry witnessed over $700 billion in deals by rivals in the last three years as wireless carriers and cable operators rush to add more services. Dish, which lost the bidding for Clearwire, added spectrum in an auction last month and also started Sling TV, an online service charging $20 a month.
As reported by ValueWalk, Ergen recently returned to Dish as chief executive for a second term as Dish tries to reverse notable subscriber losses.