BETHESDA, Md.-Lockheed Martin Corp. and Comsat Corp. agreed to merge in a two-phase deal valued at about $2.7 billion, said the companies.
During the first phase of the transaction, Lockheed Martin will begin a cash tender offer to purchase 49 percent of the outstanding common stock of Comsat for $45.50 per share. The tender is subject to approvals of Comsat shareholders and the Federal Communications Commission.
The companies expect the approval process to take six to nine months to complete.
The second phase of the merger agreement specifies the merger of a second Lockheed Martin subsidiary and Comcast. Terms of the agreement call for Comsat to become part of Lockheed Martin Global Telecommunications, a wholly owned subsidiary formed recently to provide satellite network-based solutions and to develop terrestrial networking technologies for corporate and government customers worldwide, said the companies.
The agreement is contingent upon enactment of federal legislation that would remove existing restrictions on authorized carrier ownership of Comsat voting stock.
“This agreement gives value to our shareholders, offers opportunities for our employees and adds competition to the marketplace,” said Betty C. Alewine, president and chief executive officer of Comsat. “Working together, Lockheed Martin and Comsat will meet the exploding demand for broadband, Internet and virtual private network services.”
Comsat’s focus is on international satellite communications services and digital networking services and technology. The company is the U.S. signatory to the International Telecommunications Satellite Organization and the International Mobile Satellite Organization.
Lockheed Martin’s Global Telecommunications subsidiary includes Lockheed Martin Intersputnik, a joint venture between Lockheed Martin and Moscow-based Intersputnik that is scheduled to deploy its first satellite early next year; Astrolink System, a Lockheed Martin strategic venture that will provide global interactive multimedia services using next-generation broadband satellite technology; Communications Systems, which markets commercial satellite communications systems capabilities, including network engineering and systems integration expertise; and Lockheed Martin’s joint venture with GE Americom that is scheduled to launch a satellite next year to service broadcasters in the Asia-Pacific region.
