Yesterday’s big news that top satellite company, Intelsat, plans to buy its rival PanAmSat in a $6.4 bil. deal shook up the relatively sleepy satellite business, but according to this item in The Deal, regulators could derail that ambition plan. Penned by Ron Orol and Lou Whiteman, the article contends that although regulators are unlikely to block the deal outright, they could impose so many divestiture conditions, particularly in the U.S., that both companies might rethink the combination.
Intelsat, which generates revenues primarily in the telephony and data businesses, had earlier announced plans to enter the video transmission business. PanAmSat is already a major player in video transmission in the U.S., and a merger could scuttle Intelsat’s plan to compete in that market, thus lessening competition and inviting greater regulatory scrutiny. The two companies argue that the relevant market isn’t just satellite transmission of video. Their biggest competition: long-haul, land-based fiber delivery systems.
Cynthia Brumfield at 6:18 PM|Comments(0)
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