Merger proceeding on schedule

Signal, Nov 1999

Merger Proceeding on Schedule-With the approval of the U.S. Department of Justice and the Federal Communications Commission (FCC), the first phase of the proposed merger of Lockheed Martin Corporation and COMSAT, both headquartered in Bethesda, Maryland, has cleared all regulatory hurdles. That first phase consists of Lockheed's cash tender offer to acquire 49 percent of COMSAT's stock at $45.50 per share.

The second phase entails the merger of COMSAT with a subsidiary of Lockheed Martin currently known as Lockheed Martin Global Telecommunications. Conclusion of the second phase is contingent upon the satisfaction of certain conditions, including enactment of federal legislation to remove existing restrictions on authorized carrier ownership of COMSAT's voting stock. Meanwhile, the FCC has taken an interim step toward privatization of INTELSAT by authorizing satellite users to have direct access. INTELSAT, a wholesaler of satellite communications, is operated as a commercial cooperative by 143 member countries. The action ends COMSAT's role as the exclusive provider of INTELSAT access in the United States. Users will pay a signatory surcharge of 5.58 percent to cover COMSAT's costs as the U.S. participant in INTELSAT. The privatization of INTELSAT is scheduled to be finalized in the first quarter of 2001.