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Last Updated: Monday, 29 August 2005, 15:47 GMT 16:47 UK
Satellite firms agree $3bn tie-up
Neil Armstrong walking on the moon in 1969
Intelsat satellites helped capture the first moon landing in 1969
Two of the world's largest satellite communications firms are set to join forces after Intelsat announced a $3.2bn (1.7bn) deal to buy PanAmSat.

Bermuda-based Intelsat has made an all cash offer for the US company PanAmSat, whose technology transmits nearly 2,000 TV channels worldwide.

If approved by PanAmSat shareholders and US regulators, the combined firm will have annual sales of about $1.9bn.

PanAmSat, which was once owned by US broadcaster DirecTV, floated in March.

'Ideal partners'

PanAmSat's board of directors is supporting the deal while shareholders controlling 59% of the company's shares have already agreed to back it.

Intelsat pioneered satellite communications on its launch in the 1960s and transmitted live pictures of the first moon landing in 1969.

Privatized in 2001, Intelsat now specialises in distributing video, voice and data services for broadcasters, blue-chip companies and governments in 220 countries.

The company said the deal - which is expected to take up to a year to complete - would create an industry leader with the world's largest commercial satellite fleet.

This is a 'win win' for both companies
Joseph Wright, PanAmSat chief executive officer

"The two companies are complementary in customer, geographic and product focus," said David McGlade, Intelsat's chief executive officer.

"We will continue providing the highest level of service to existing customers while growing new business in the rapidly expanding communications market."

Popular investment

The $3.2bn offer represents a 40% premium to the value of PanAmSat's shares when they floated earlier this year.

"This is a 'win win' for both companies and a terrific outcome for all PanAmSat's shareholders," said its chief executive officer Joseph Wright.

Satellite operators have proved popular with investors in recent times.

A consortium of private equity firms led PanAmSat's $4.2bn buyout from DirecTV last year, while British firm Inmarsat floated on the London stock market earlier this year.

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