Regulators Clear
Boeing / Hughes Deal
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U.S. and European
regulators approved Boeing’s US$3.75 billion  purchase
of Hughes Electronics Space and Communications division, subject to
conditions.
The U.S. Federal Trade Commission
(FTC) will require that Boeing maintains a firewall between its
launch (Delta and Sea Launch) and satellite divisions. The agreement
calls for a trustee to monitor Boeing to ensure that it complies
with the terms of the order. The FTC decree means that Boeing will
no longer be able to provide systems engineering and technical
assistance services to the U.S. Department of Defense for a
particular classified satellite program. The FTC said Boeing is the
sole supplier of a particular unidentified classified program and
Hughes is one of two competing contractors.
The European Union antitrust
regulators also approved the acquisition after its investigation
regarding how the deal would affect the European satellite market.
The European Commission (EC) said in a statement “The
investigation dismissed earlier doubts that the operation could
significantly strengthen Hughes' position in commercial
geostationary communication satellites, as well as the concern that
the parties might induce Hughes' satellite customers to procure
launch services from Boeing.” The EC initially feared the purchase
could further strengthen Boeing’s market share by the sharing of
sensitive information between the saetllite and launch divisions.
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