U.S. asks Lockheed, Comsat for more details of takeover $3.16 billion deal opposed, under antitrust review

December 19, 1998|By BLOOMBERG NEWS

WASHINGTON -- Lockheed Martin Corp. said yesterday that the Justice Department wants additional information about the No. 1 defense contractor's planned $3.16 billion purchase of Comsat Corp., a satellite company created by the government.

Lockheed's proposed acquisition already is opposed by PanAmSat Corp., the world's largest commercial satellite operator.

PanAmSat urged the Federal Communications Commission last month to block the transaction so long as Comsat has the sole right to sell services of Intelsat, a global satellite organization, in the United States.

Lockheed said it received a request for more information from Justice's antitrust division. The division also sought information from Comsat, Lockheed said.

The FCC is reviewing the transaction to determine whether it is in the public interest.

Lockheed, which makes satellites, is proposing to purchase up to 49 percent of the Comsat common stock at $45.50 a share for $1.3 billion and assume $455 million in debt. It also plans to issue 0.5 shares of its stock for each remaining share of Comsat, an exchange valued at about $1.4 billion.

Lockheed seeks to acquire Comsat to boost its fledgling satellite transmission business. The market for such services is expected to more than double from $50 billion today to $120 billion in 2002.

In addition to the Justice Department and FCC reviews, the acquisition must clear a legislative hurdle; federal law restricts the sale of more than a 10 percent share of Comsat stock to either a telephone company or a common carrier.

Shares of Lockheed rose 18.75 cents in trading yesterday to close at $94.25. Comsat shares fell 43.75 cents to $37.50.

Pub Date: 12/19/98

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