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Nearly two years of politicking paid off Monday for Lockheed Martin Corp. when it secured final government approval for its acquisition of Comsat Corp. The Federal Communications Commission ruled that the cash and stock deal was in the public interest because it could lead to efficiencies that would make the companies more competitive in the global telecommunications marketplace. “The merger would not have any adverse impact on the current level of competition in any relevant market relating to the provision of satellite services,” the FCC said in a statement. Lockheed spokesman Chip Manor said the companies expect to close the transaction by the end of the week. Lockheed announced a two-step acquisition of Comsat in September 1998, in a deal valued then at $2.7 billion. In the first phase, Lockheed paid $1.2 billion of cash–or $45.50 per share–for 49% of the satellite concern. It then began lobbying Congress to amend the 1962 Communications Satellite Act, under which no shareholder could own a controlling stake in Comsat. Lawmakers consented in March, enacting the Open-Market Reorganization for the Betterment of International Telecommunications Act. This law permitted Lockheed to acquire the rest of Comsat in a one-for-one stock transfer. But it also gave telecommunication companies permission to bypass Comsat and negotiate directly with Intelsat, the international satellite telecommunications consortium. Manor said the Bethesda, Md.-based companies always expected Congress to provide some type of direct access to Intelsat. “We think this is still a good deal,” he said. “The strategic underpinnings are still there.” Intelsat is expected to be privatized next year. Comsat would then emerge as one of the primary shareholders of the international satellite concern. Lockheed traded mid-Monday at $28 per share, $0.38 above Comsat’s price. At the mid-day price, the stock swap would be valued at $761 million and the total deal at nearly $2 billion. The five FCC commissioners actually approved the sale at a closed-door meeting on Thursday, but did not release the ruling until Monday. Copyright �2000 TDD, LLC. All rights reserved.

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