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EchoStar may split into 2 publicly traded firms

September 26, 2007|From the Associated Press

EchoStar Communications Corp. said Tuesday that it might split into two publicly traded companies, one to operate the Dish satellite TV service and the other to focus on technology development.

The news came one day after EchoStar said it would acquire Sling Media Inc., a privately held video technology company, for $380 million.

Sling's products include the Sling Box, which enables users to watch television streamed from their homes to a computer elsewhere. The gadget has caused concerns among some program providers.

EchoStar Chief Executive Charles Ergen said a split of the company wouldn't affect Dish Network's 13.6 million customers.

Ergen said the separation of the company's consumer and wholesale technology businesses would allow both to pursue their respective goals and unlock additional value.

Investors embraced the announcements, sending shares of Englewood, Colo.-based EchoStar up $2.82, or 6.8%, to $44.14. Shares have traded from $31.40 to $49.69 during the last year.

EchoStar has asked the Internal Revenue Service to declare the split a tax-free transaction.

The technology company to be spun off from EchoStar would include a set-top box design and manufacturing business, units that provide satellite service to other companies and several international assets.

Ergen would continue to serve as chairman and CEO of Dish Network and fill the same roles at the spun-off company.

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