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SES to buy GE satellite arm
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March 28, 2001: 6:48 a.m. ET
Luxembourg satellite firm to buy General Electric's satellite unit for $5B
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LONDON (CNN) - Luxembourg's Societe Europeene des Satellites agreed on Wednesday to buy General Electric's satellite unit for $5 billion in stock and cash.
The acquisition of General Electric's GE Americom Communications for $2.7 billion and 15.4 million shares catapults SES to new heights, making it the world's biggest satellite service provider.
SES operates a satellite service network across four continents, under the ASTRA brand, the leading direct-to-home satellite system in Europe. The U.S. was the only major market that it needed to become a global operator.
The purchase gives SES an established platform in the U.S. to pursue its rapidly expanding Internet-access and data-transmission businesses. SES said it plans to form a new company called SES Global to pursue the deal.
"The new SES Global organization will be well positioned to build the future of broadband satellite communications through a global satellite fleet," Romain Baush, director general of SES, said in a statement.
Americom provides services around the world through a fleet of 17 wholly-owned satellites to company's such as AT&T (T: Research, Estimates), Disney (DIS: Research, Estimates), NBC and AOL Time Warner (AOL: Research, Estimates), the parent of CNN.
"SES Global will become the world's premier broadband satellite services provider with a combined satellite fleet comprised of 28 wholly-owned satellites as well as 13 additional satellites through partnership and investment interests," SES said in a statement.
Under the terms of the agreement, GE (GE: Research, Estimates) will hold 25.1 percent of SES Global and 20.1 percent of the company's voting rights. SES Global had pro forma fiscal 2000 revenue of  1.4 billion ($1.26 billion) with earning before interest, tax, debt and amortisation of 1.2 billion, the company said.
SES plans to fund the acquisition through a combination of debt and new equity. The company will float 25 percent of SES Global and may list on a U.S. stock exchange. On completion of the acquisition the company expects to have a value of about 14 billion.
SES Global plans to issue shares to existing SES shareholders, including Luxembourg's public institutions to maintain their current level of ownership and voting interest in SES, and German telecommunications giant Deutsche Telekom (FDTE) , which currently owns 21 percent of SES. 
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