Shareholders in US satellite communications service provider Comsat have approved its proposed merger with Lockheed Martin, removing one barrier to the complex deal. Regulatory approval and legislation are still needed before the merger can go ahead, but the move has been helped by a recent US Senate vote to deregulate the international satellite telecommunications industry.
Legislation would pave the way for the rapid privatisation of Intelsat, in which Comsat is the US stakeholder and largest shareholder, and would update the country's 1962 Communications Satellite Act to enable the merger with Lockheed Martin to proceed. Intelsat is due to be privatised in the first quarter of 2001.
Comsat is also the largest shareholder in New Skies Satellites, a global system of five satellites spun off from Intelsat as a commercial venture last year. The US company is the largest shareholder in Inmarsat, which was privatised fully in April.
Lockheed Martin plans to acquire 49% for cash in the first phase of the merger, subject to US Federal Communications Commission approval of the company as an "authorised carrier" under the Satellite Act. The acquisition also requires anti-trust approval.
In the second phase of the transaction, Comsat would merge with Lockheed Martin's new Global Telecommunications subsidiary in a stock-swap deal. This would require legislation to remove existing ownership restrictions on Comsat voting stock, and although the Senate's satellite reform legislation would accomplish this, it still has to be approved by the full Congress.
Source: Flight International
