EchoStar Stock Soars After $23 Billion Deal With AT&T. What to Know.

AT&T said on Tuesday that it had agreed to acquire EchoStar’s spectrum licenses for $23 billion. (Justin Sullivan/Getty Images)

AT&T said on Tuesday that it intended to buy spectrum licenses from EchoStar in a $23 billion deal that could shake up the telecommunications industry.

Shares of AT&T climbed 0.2% to $28.81, and EchoStar stock soared 76% to $52.68 in early trading. The S&P 500 was flat.

The moves came after the two wireless network operators unveiled a deal in which AT&T will buy EchoStar’s spectrum licenses that give it the exclusive rights to a slice of the radio-frequency spectrum in specific areas. AT&T said the transaction would help it “maintain long-term leadership in advanced connectivity across 5G and fiber.”

AT&T also stood by its 2025 guidance of adjusted earnings of between $1.97 and $2.07 a share, and a stock buyback plan that includes an expected $20 billion of share repurchase capacity between 2025 and 2027.

The deal is expected to close in mid-2026, subject to regulatory approval.

EchoStar plans to use the proceeds from the transaction to retire debt and fund its continued operations and growth initiatives, CEO Hamid Akhavan said.

The $23 billion purchase price is $9 billion more than the amount EchoStar paid for the spectrum, and $5 billion more than its appraised value, New Street Research analyst Philip Burnett said in a research note. He added that the deal was a “great mark on value,” noting that the excess cash could be worth about $25 a share for investors.

Write to George Glover at george.glover@dowjones.com