In a movement of assets from one Charlie Ergen-controlled public company to another, Dish Network has acquired set-top manufacturing and development operations, as well as various Sling TV components, from sibling company EchoStar.
The deal, structured as a tax-free exchange, makes EchoStar essentially just a satellite services company.
“With this transaction, we will vertically integrate all the elements that define our customer experience—one team will deliver the full Dish and Sling TV experience end to end,” said Erik Carlson, president of Dish Network, to the Denver Business Journal. “Not only do we gain full control of the product development roadmap for [satellite] and Sling TV, but we also anticipate achieving operational efficiencies.”
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The deal is expected to close by March 30.
Under terms of the swap, Dish will receive a development group focused on Sling TV and software technology. It will also receive a unit focused on set-top box development. Other assets moving over to Dish include those focused on satellite uplink and fiber-optic backhaul for Dish Network’s transmissions.
Also involved: real estate owned by EchoStar in Colorado, Arizona and Wyoming, and the 10% interest EchoStar owns in Sling TV LLC, the companies said.
Meanwhile, Vivek Khemka, executive VP and CTO for Dish, will work exclusively for Dish after several months of splitting time as acting president of EchoStar.
As for EchoStar’s compensation, it will receive the 80% interest Dish holds in the Hughes Retail Group, a consumer satellite broadband services operation within EchoStar.
Charlie Ergen is founder and controlling shareholder for both businesses, which operate out of Douglas County, Colorado.