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The Boeing Co. secured regulatory approval in the United States and Europe Wednesday to acquire the Hughes Space and Communications business from General Motors Corp. for $3.75 billion. To win antitrust clearance, Boeing agreed to a series of restrictions on its behavior. They generally bar the company from discriminating against competing satellite and rocket makers. In an unusual bid to coordinate efforts, the U.S. Federal Trade Commission released its order approving the deal at 12:01 a.m. The European Commission was expected to unveil an order, essentially identical, at the same time. “This consent agreement will ensure that competition in the highly specialized markets for satellite and launch vehicles will be maintained,” said Richard Parker, director of the FTC’s bureau of competition. Parker praised the collaboration between the FTC and EC and credited a 1991 antitrust agreement between the U.S. and the European Union. Seattle’s Boeing and Detroit based General Motors announced the deal Jan. 13. It calls for Boeing to pay $3.75 billion in cash, which amounts to 1.6 times the space division’s 1999 revenue of $2.3 billion. At the time the deal was announced, Boeing Chairman Philip Condit said the company wanted to capture more of the space and communications market, which he said will grow from $40 billion in 1999 to $120 billion in 2010. “This acquisition is a significant step forward in executing our goal of becoming the industry leader in integrated, space-based information and communications,” Condit said in January. The deal set off alarms in the U.S. and Europe, where regulators feared an integrated maker of launch vehicles and satellites could discriminate against companies involved in only one aspect of the business. The FTC also worried that the U.S. Department of Defense could have to pay more for an unidentified classified program where Boeing and Hughes are the primary providers of technical assistance. To remedy these problems, the companies agreed to a ban on the sharing of non-public data between the launch vehicle business and the satellite division. Boeing also must provide technical information to other rocket producers on how to make satellites compatible with launch vehicles. Finally, it must help the Defense Department take over the technical assistance aspects of the unidentified classified program. Sheila Widnall will oversee the consent decree; as trustee, she will evaluate compliance and report violations to the FTC. Copyright (c)2000 TDD, LLC. All rights reserved.

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