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EchoStar Mulls Splitting Up

Shares rise 6%.
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Dish Network operator

EchoStar Communications


said it will consider separating its businesses into two publicly traded companies, sending its shares higher.

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EchoStar was recently up 6.1% to $43.85 Tuesday.

The proposed plan would have EchoStar's U.S. consumer pay-TV business continue to run as the Dish Network. Most of the company's other technology and infrastructure assets would be spun off in a transaction intended to be tax-free to EchoStar and its shareholders.

"We believe separation of our consumer-based and wholesale businesses could unlock additional value," EchoStar said in a press release. "Each company would be able to separately pursue the strategies that best suit its respective long-term interests. The spinoff transaction would also allow employee incentives to be tied to their respective company's performance, and improve opportunities to effectively develop and finance expansion plans."

The spinoff assets would include EchoStar's set top-box design and manufacturing business, its international operations and assets used to provide fixed-satellite services to third parties, together with satellites, uplink centers and spectrum licenses not considered core to the Dish Network's subscriber operation.

Separately, EchoStar said it has agreed to acquire Sling Media, a privately held maker of electronic boxes that allow users to watch television through the Internet. The transaction values Sling Media at approximately $380 million.