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Hughes to buy PanAmSat
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September 20, 1996: 10:33 a.m. ET
$3 billion cash and stock deal creates world's biggest private satellite co.
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NEW YORK (CNNfn) -- Hughes Electronics Corp. on Friday said it has reached an agreement to buy PanAmSat Corp., the world's largest private satellite company, for $3 billion in cash and stock.
Hughes will merge PanAmSat with its domestic satellite business and create a publicly traded company. The combined company will be 71.5 percent owned by Hughes, with the remaining 28.5 percent owned by PanAmSat shareholders. The new company will retain the name PanAmSat and will keep its headquarters in Greenwich, Conn.
The deal creates the world's second-largest satellite network, behind the government-owned Intelsat.
Hughes operates 10 communications satellites above the United States. PanAmSat ownes four international satellites. The companies plan to launch another seven satellites through 1998.
Hughes, a unit of General Motors, will pay PanAmSat shareholders roughly $30 a share in cash and stock.
"By combining Hughes' and PanAmSat's strengths in domestic and global satellite communications, we will be bringing a new level of service to our customers throughout the world," C. Michael Armstrong, chairman and chief executive officer of Hughes, said in a statement.
Hughes' satellites carry telephone traffic and beam down signals from cable television networks including CNN and Home Box Office.
Hughes will not include its U.S. DirecTV satellite-to-home television service in the merger. The company will also keep separate its satellite TV service in Latin America.
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