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SES
to Acquire GE Americom
SES Global S.A. is
buying GE American Communications Inc. (owned by General Electric
Company - GE) for US$5 billion in cash and stock. SES Global will
pay US$2.7 billion in cash and the rest in shares for GE Americom,
financing the acquisition by issuing new debt and new equity.
General Electric will gain a 25.1 percent stake and 20.1 of the
voting rights in SES Global. SES Global will also acquire Societe
Europeenne des Satellites S.A. (SES Astra), Europe's leading
direct-to-home satellite TV system, in a 1-for-1 stock swap. SES
doesn't expect problems receiving regulatory or antitrust approval
from the U.S or European agencies.
The acquisition
will give SES Global a total of 28 satellites (11 Astra and 17 GE
Americom), plus partnership and investment interests in 13 others
positioned primarily above Asia and Latin America in geosynchronous
orbit. The new company will have eight satellites on order. The only
region largely excluded from SES Global's coverage is Africa. SES
Astra leases capacity to major European broadcasters, including
British Sky Broadcasting, Canal+ and Kirch's Premiere World. GE's
management apparently recommended selling to SES partly on the
grounds that GE's remaining stake was likely to appreciate.
SES Global hopes to
build a brand image in the U.S. for its multimedia kiosk in the
sky. SES's long-term strategy entails combining satellite and
ground-based capabilities, partly to store high-quality video and
Internet files as close as possible to the end user.
SES Global will
have a pro forma combined revenue of US$1.28 billion (1.4
billion) and earnings before interest, taxes, depreciation and
amortization of US$1.1 billion (1.18 billion). The combined debt
of the company will rise to 3.7 billion in 2001, from 900
million for SES at the end of 2000. The combined company has a
market value of about 14 billion and is aiming to float 25
percent, or shares worth US$700 million, of its new share capital on
a U.S. Exchange in a public share offering, given market conditions
are favorable. SES is currently traded in Luxembourg and Frankfurt.
The Luxembourg government or financial institutions there are likely
to buy into the IPO, so the government can maintain its ownership
stake.
SES
was being advised by Morgan Stanley Dean Witter & Co., Deutsche
Bank AG and Dresdner Bank's Dresdner Kleinwort Wasserstein, all of
which are helping finance the deal. Merrill Lynch was advising GE.
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