Satellite TV provider Dish Network proposed a $25.5 billion merger with Sprint Nextel this morning in a bid to drive out competition from Japanese carrier Softbank, which in October offered $20 billion to take a 70 percent stake in the cellphone company.
Dish Network's offer consists of $17.3 billion in cash and $8.2 billion in stock. Sprint shareholders would get $7 per share, based upon Dish's closing price on Friday.
"Sprint is in play," Dish Network chairman Charles Ergen told The Wall Street Journal. "We think we've made an offer that's much more compelling than the Softbank transaction."
In an open letter, Ergen proposes a combined company that would "offer a fully integrated, nationwide bundle of in- and out-of-home video, broadband, and voice services."
This deal would be latest in the telecom industry to address a relentless demand by consumers to watch video, surf the Internet and communicate on any device at any time and anywhere, The Washington Post reported.
Ergen has long expressed an interest in breaking into the wireless industry and becoming a viable competitor to AT&T and Verizon. In January, Dish attempted to gain control of Clearwire network, which is partially owned by Sprint. In December, Dish gained approval from the Federal Communications Commission to build its own LTE network.
The mogul likened today's development to an episode of Seinfeld. For Ergen it has been a meandering narrative of business moves, and this is the neat conclusion that ties it all together.
“I think everybody on this call probably has two necessities in life: food and shelter,” he reasoned on a conference call with The Wall Street Journal. “But after that you probably get to your mobile device and your TV as three and four…You want to be able to be connected no matter where you are, and you want to be able to watch your television no matter where you are.”