COMSAT
From Wikipedia, the free encyclopedia
The Communications Satellite Corporation (COMSAT) is a global telecommunications company, based on the USA, and with branches in Brazil, Argentina, Colombia, Mexico, Peru, Venezuela and several other countries in the Americas. It is present also in Turkey. Although it operates many kinds of data communication modalities, it is best known for its satellite communication services.
[edit] History
COMSAT began operations with its headquarters in Washington, DC, in 1963. In August 1964 it helped create and was majority owner for the International Telecommunications Satellite Consortium (INTELSAT). COMSAT was responsible for the launching of the Early Bird communications satellite, on April 6, 1965, and has been instrumental in the expansion of communications throughout the world through its various international subsidiaries.
In 1982, COMSAT threatened legal action against the usage of its company name in the name of the British post-punk group Comsat Angels. Because of this, the Comsat Angels had to be billed as the C.S. Angels in the United States.
Lockheed Martin Corp. successfully purchased all the remaining shares of Comsat Corp. in a stock swap valued at US$790 million. The transaction was accomplished via a one-for-one tax-free exchange of Lockheed Martin common stock for Comsat common stock. Lockheed already owned 49 percent of the government-created satellite communications company. It had been working for two years to obtain the remaining stock, but had to wait for approval from the U.S. Congress and the U.S. Federal Communications Commission (FCC). Comsat stock ceased to be traded August 3, and all Comsat stockholders received one share of Lockheed Martin Corporation stock for each share of Comsat stock they held. During the two year approval process, Comsat shareholders lost about US$300 million in purchase value because of a drop in Lockheed Martin stock as the two companies struggled through complex congressional and regulatory hurdles.
Comsat will become an integral element of Lockheed Martin Global Telecommunications (LMGT), a wholly owned subsidiary of Lockheed Martin Corporation, comprising Lockheed Martin's telecommunications services business. LMGT becomes the U.S. owner, and the largest shareholder, in both the INTELSAT and Inmarsat systems. Inmarsat was fully privatized on April 15, 1999. Comsat serves as the U.S. Signatory to INTELSAT, and will continue in that role until INTELSAT's expected privatization in 2001 at which point it will become a shareholder. LMGT also is the largest owner in New Skies Satellites, N.V., a global, six-satellite system spun-off from INTELSAT into a private commercial company in 1998. The company decided to use the Lockheed Martin name for the new venture because "when you say you're from Lockheed Martin, it opens a lot more doors than if you say you're from XYZ company." However, the company will still do business overseas under the Comsat name.
Although LMGT is a wholly owned subsidiary of Lockheed Martin, the company plans an initial public offering of stock in the telecommunications venture within the next 18 months that would reduce its holding in LMGT to a minority stake. LMGT is actively seeking partners for its satellite business and hopes to have a deal within the next six months. While it is unlikely LMGT would make another deal on the scale of its acquisition of Comsat, "there could be small acquisitions that become very, very significant to our long-term success," said John V. Sponyoe, LMGT's chief executive officer.
The Comsat transaction, was accomplished in two phases. It was first announced in September 1998. In September 1999, the FCC authorized Lockheed Martin, through its subsidiary, Regulus, to acquire Comsat subsidiary Comsat Government Services and to purchase up to 49 percent of Comsat stock. The first phase, a cash tender offer for 49 percent of the outstanding shares of Comsat common stock valued at approximately US$1.2 billion, was completed following Comsat shareholder approval and initial regulatory approvals in September 1999. At that time, Lockheed Martin could not purchase more than 49 percent as the Satellite Act prohibited greater than 50 percent aggregate common carrier ownership in Comsat. On March 17, the Open-Market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act) was enacted by the U.S. Congress and signed by President Clinton, allowing the merger to proceed while also overhauling the Communications Satellite Act of 1962. Following FCC authorization on July 31 for Comsat to assign its licenses and authorizations to a subsidiary of Lockheed Martin, thereby facilitating Lockheed's purchase of the satellite company, the second phase, the one-for-one stock exchange of the transaction was completed.
The FCC said it granted the request to allow Lockheed Martin to acquire Comsat based on the, "lack of potential competitive harm and beneficial efficiencies resulting from the transfer." The commission also said it found that Lockheed Martin's purchase of Comsat is in the public interest. In making this finding, the FCC said it determined the merger would not have any adverse impact on the level of competition in any relevant market relating to the provision of satellite services. The commission also said it found the acquisition of Comsat may have potential efficiencies that will allow the merged company to compete more effectively in the global telecommunications marketplace.
The Comsat Corporation was created by the Communications Satellite Act of 1962 and incorporated as a publicly traded company in 1963. Comsat was the driving force in the creation of INTELSAT, an international satellite organization that today has 143 member countries and signatories. Comsat, over its 38-year history, served as a global provider of satellite services and digital networking services, products, and technology.
Betty C. Alewine, the chief executive of Comsat, announced that she is leaving the company, along with several other top administrators. Alewine and other Comsat executives departed with significant cash-and-stock-option bonus packages, but the extent of those packages was not available. Lockheed Martin executives said they probably will lay off 40 to 50, or 2 percent, of the LMGT's 2,200 workers. The bulk of the 1,700 Comsat employees will continue to be based at Comsat's office, also in Bethesda.
