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Lockheed Martin bids for satellite outfit

But the deal may be tricky to pull off

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US aerospace giant Lockheed Martin has moved to add some meat to its proposed global network services operations with a $2.7 billion bid for Comsat Corp. Lockheed Martin formed a subsidiary. Lockheed Martin Global Telecommunications, in April in order to cater for the satellite data, video and voice telephony markets. Global Telecommunications intends to sell these services to major international corporation, and the acquisition of Comsat, which provides access to international satellite networks, would give it a flying start. But there are special considerations. Comsat was established by Congress in the 60s to act as the US representative within the international Intelsat system. More recently Congress has agreed to privatise it, and intends to remove the rule that will stop other parties buying more than 49 per cent of Comsat. At the moment, however, Lockheed Martin is limited to that 49 per cent, and is bidding $1.3 billion for it in the first phase of its offer. It then proposes a $1.4 billion stock deal for the remainder, but this will require legislation. Comsat's competitors may however have a hand in forming the bill that will free the outfit from the state, and might even try to derail the merger. Lockheed Martin could be seen (especially from a UK perspective, as we know about such things) to be attempting to pre-empt the privatisation process, while Comsat's monopoly on Intelsat access from the US (which it wants to retain) seems anti-competitive. So this deal could get messy. ®

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