Graham Warwick/WASHINGTON DC
Lockheed Martin has boosted its bid to become a turnkey commercial satellite communications service provider by agreeing to acquire Comsat for around $2.7 billion. Comsat is the US member of Intelsat and Inmarsat and the largest provider of space segment capacity for both international satellite communications organisations.
If the merger is approved by shareholders and the US Government, Comsat will become part of Lockheed Martin's newly formed subsidiary, Global Telecommunications Services. The group brings together the company's various ventures to launch and operate commercial satellites, with the aim of providing global communications network services to corporations and governments (Flight International, 16-22 September).
Lockheed Martin says the merger will create "a dynamic new global competitor", while Comsat president Betty Alewine says the two companies, working together, "-will meet the exploding demand for broadband, Internet and virtual private network services". Analysts say the merger will place Lockheed Martin among the top five service providers worldwide. The company is already in the top three of both launch service and commercial satellite providers.
The Comsat deal has two phases. First, Lockheed Martin will make a cash offer, estimated at $1.3 billion, for up to 49% of Comsat's stock. This will require US Federal Communications Commission approval and authorisation of Lockheed Martin as a satellite communications carrier. This is expected to take six to nine months, the company says.
The second phase, a stock-swap deal involving the merger of Comsat into Lockheed Martin and valued at around $1.4 billion, will require legislation to remove restrictions on the ownership of Comsat stock by an authorised carrier. The company says such legislation has already been introduced in Congress.
According to Global Telecommunications Services chief executive John Sponyoe, Lockheed Martin and Comsat "-are committed to achieving timely, pro-competitive privatisation of Intel- sat and Inmarsat".
Source: Flight International
