Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Sprint Nextel Corporation (S): DISH Network Corp (DISH) Looking to Become Industry-Leader With It

It looks like M&A is back. DISH Network Corp (NASDAQ:DISH) announced on Monday a large bid for Sprint Nextel Corporation (NYSE:S), with which it is looking to become the biggest player in video, broadband and voice services. Reportedly, the merger would provide great value for shareholders of both companies, and huge synergy-related benefits. In any case, the offer looks substantially better than a previous bid from Softbank, and seems to have a good chance of success.

DISH Network CorpTerms of the Deal

DISH Network Corp (NASDAQ:DISH) has offered to pay around $25.5 billion for Sprint Nextel Corporation (NYSE:S), offering $4.76 in cash and 0.05953 shares of DISH Network Corp (NASDAQ:DISH) stock per Sprint Nextel Corporation (NYSE:S) share. The bid represents a premium of roughly 12% to the Friday closing price of Sprint Nextel Corporation (NYSE:S), but following the news, Sprint Nextel Corporation (NYSE:S)’s stock price quickly caught up to the $7.00 at which the DISH Network Corp (NASDAQ:DISH) deal values the company. Previously, Sprint Nextel Corporation (NYSE:S) had agreed to sell a 70% stake in the company to Japan’s Softbank Corp for around $20 billion.

According to DISH Network Corp (NASDAQ:DISH) management, the deal is set to unlock significant value for shareholders through an enhanced strategic position for the combined companies, and synergy-related benefits currently estimated at around $37 billion. In other words, the merger of the two companies would solidify the position of both; their products and services complement each other, and they can achieve considerable savings through enhanced economies of scale.

DISH Network Corp (NASDAQ:DISH) says the deal is clearly superior to Softbank’s bid, not only because of the combined strength of the companies, but also because of the higher price with a larger cash percentage.

The deal would reportedly result in an industry-leading spectrum portfolio, and would allow the coporation to provide a seamlessly integrated home and mobile bundle of video, broadband, and voice services. According to DISH Networks’ chairman Charles Ergen, the deal could upon completion propel the merged companies to a position of national industry leadership. The deal will be funded by $8.2 billion of DISH’s own balance sheet, with the rest covered by debt financing.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.