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The tiny European nation of Luxembourg and the vastness of outer space are two places that most M&A lawyers probably know little about. But thanks to a Paul, Weiss, Rifkind, Wharton & Garrison partner’s intimate knowledge of both, a company in this ancient duchy stands poised to become the first global satellite company. In March, Soci�t� Europ�enne des Satellites S.A. (SES) agreed to purchase GE American Communications Inc., the satellite services unit of General Electric Company, for about $5 billion in cash and stock. Very much a venture of the Luxembourg government — which initially owned 20 percent of the company and now owns 16 percent — SES was founded in 1986 with the goal of becoming Europe’s first major private satellite company. The company’s offices are in a castle, the stately former summer home of the duke of Luxembourg. Phillip Spector, 50, has worked for SES from the start, when he was called in because of the reputation of his Washington, D.C., communications law boutique, Goldberg & Spector. (Last year European Counsel magazine named him “the leading satellite specialist” in D.C.) Specifically, he assisted SES with what is called “coordination,” in which a company makes sure that its fleet of satellites does not interfere with the many other systems also in orbit. Spector, who moved to the D.C. office of Paul Weiss in 1992, returned to work for SES recently as they looked for an American acquisition. GE had put its satellite unit on the block, but had held talks with at least two other competitors — EchoStar Communications Corporation of Littleton, Colo., and Intelsat, the global satellite consortium — before settling on SES. The Luxembourgers won the prize because they agreed to GE’s key demand: that it be allowed to retain a stake in the business. Following some give-and-take, the two sides decided that the deal would create a new company, SES Global S.A., in which GE would get a 25 percent equity stake, a 20 percent voting stake, and the right to name three directors. GE won on an additional point: Existing SES investors will trade in their shares for stock in SES Global. But once the terms were agreed upon, the real creative work began for the team at Paul, Weiss. American law “has developed over time to address deals structured like this one,” Spector notes. However, “Luxembourg corporate law is different,” he explains. “We did what lawyers often do in international trades: You take U.S. concepts and make them fit around local law.” Aided by Paul Mouseo of Luxembourg’s Arendt & Medernach, Spector and his colleagues were eventually able to structure the exchange of SES stock for SES Global shares in a way that the new entity would be recognized as a corporation under Luxembourg law. The deal has since been approved by the boards of both SES and GE and will be completed pending FCC and European Union approval. And thanks to some skilled legal work, a twenty-first-century satellite fleet will be run from an eighteenth-century castle in one of the world’s smallest nations.

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