Lockheed Martin Corp. is expected to close tomorrow on its purchase of the part of Comsat Corp. it does not already own now that a final regulatory hurdle has been cleared.
The Federal Communications Commission cleared the way for Bethesda-based satellite communications provider Comsat to transfer its satellite and earth station licenses to defense contractor Lockheed, also based in Bethesda.
Now, Lockheed has until the close of business tomorrow to finish paperwork completing the merger, the companies said. A Comsat spokesman said company executives would withhold comment on the merger until later in the week.
Comsat shareholders will receive one share of Lockheed for each remaining share of Comsat they hold. That exchange is worth about $770 million based on yesterday's Lockheed closing price of $29.125.
The deal has taken almost two years to complete because it was subject to congressional approval. Comsat was created by Congress in 1962.
Lockheed announced in early September 1998 that it wanted to buy Comsat to strengthen its global communications business. It then bought control of 49 percent of the company for $1.2 billion. It could not move ahead with a full merger until Congress acted to change a law that prohibited any one entity holding more than 50 percent ownership in Comsat. That change occurred in March, paving the way for the FCC to consider the transfer of Comsat's satellite communications licenses.
The FCC's approval was expected by analysts.
In issuing its order approving the license transfers, the FCC found that the merger would have no adverse effect on competition.
"The acquisition of Comsat may have potential efficiencies that will allow the merged company to compete more effectively in the global telecommunications marketplace," the FCC said.