Intelsat Ltd. has agreed to acquire satellite communications rival PanAmSat Holding Corp. for US$3.2 billion in cash, creating an industry heavyweight that will have 53 satellites covering 220 countries. Both companies provide broadband Internet, telephony and video services. Intelsat has historically been strongest in voice and data, while PanAmSat is a big provider of video services to cable TV companies, including Cable News Network and MTV. That makes their businesses complementary, they said.
If the deal goes ahead, the combined company will be able to offer its customers broader coverage and better back-up services from the additional satellites it will have, the companies said. Its customers will include cable TV providers, broadcasters, businesses, governments and consumers.
The companies hope to close the deal in six months to a year, they said. To do so, they must first get approval from U.S. antitrust regulators, the U.S. Federal Communications Commission and other regulatory bodies, as well as from a PanAmSat's shareholders.
Shareholders owning about 58 percent of PanAmSat's stock have agreed to approve the deal, the companies said. Both boards of directors have also approved it.
Intelsat, which is privately held, will pay $25 per share for PanAmSat, a premium over its closing price of $19.80 Friday on the New York Stock Exchange. Intelsat will also take on $3.2 billion of PanAmSat debt.
Intelsat has its headquarters in Pembroke, Bermuda, while PanAmSat is based in Wilton, Connecticut.
David McGlade, Intelsat's chief executive officer, will be CEO of the combined company and a board member. PanAmSat CEO Joseph Wright will become chairman.
The combined company will have pro forma annual revenue of more than $1.9 billion, the companies said.
They did not discuss any potential lay-offs in the statement. They said they would provide further details in a conference call later Monday. -- IDG News Service