As predicted [WAMN: 27-Mar-01], Luxembourg-headquartered satellite operator Société Euopéenne des Satellites yesterday announced it would acquire General Electric’s Americom satellite subsidiary for $5 billion in cash and shares.
The deal, which brings together Americom’s twelve US and four overseas satellites with the eleven owned by SES in Europe, will create the largest company in the industry, overtaking US-based PanAmSat’s total of twenty satellites. Revenues in 2000 for the merged company would have been $1.3bn, compared to PanAmSat’s $1bn.
Under the terms of the deal, SES will set up a new company, titled SES Global, in which General Electric Capital will receive a 25.1% stake plus $2.7bn in cash. The new group will also buy 100% of SES, which will carry on functioning as the merged company’s European arm.
In addition, the government of Luxembourg will receive a 16.66% holding in SES Global (the same stake it held in SES) and a 33.33% voting interest, while GE’s shares will carry a 20.1% vote.
“This is the first truly global network of regional satellite systems,” enthused SES chief executive Romain Bausch. “We believe that the industry is really in a transition phase and it’s going towards consolidation.”
The merger must still obtain approval from regulators, but SES hopes to have the deal completed by year-end.
News source: Financial Times