WASHINGTON — Shareholders of imaging satellite operators GeoEye and DigitalGlobe have approved the merger of the companies in a transaction that would create a single major provider of commercial satellite imagery to the U.S. Department of Defense, the companies announced Dec. 3.

Herndon, Va.-based GeoEye and Boulder, Colo.-based DigitalGlobe announced their plans to merge in July, putting to rest months of speculation and jockeying driven by a significant projected drop in the U.S. government’s commercial satellite imagery purchasing budget. Both companies operate multiple imaging satellites and are developing more-capable craft and ground infrastructure under contracts with the U.S. National Geospatial-Intelligence Agency (NGA).

Under the terms of the merger agreement, GeoEye shareholders will be entitled to 1.137 shares of DigitalGlobe stock and $4.10 in cash, $20.27 in cash, or 1.425 shares of DigitalGlobe stock for each GeoEye share they own. The deal is still awaiting U.S. regulatory approval and is now expected to close early next year.

The combined company is expected to have more than $600 million in revenue this year, driven primarily by the NGA contracts. DigitalGlobe executives expect the merger to save some $1.5 billion over 10 years, primarily through the elimination of redundant ground facilities and by delaying the planned launch of GeoEye’s newest satellite until it is needed by the combined company.

 

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Warren Ferster is the Editor-in-Chief of SpaceNews and is responsible for all the news and editorial coverage in the weekly newspaper, the spacenews.com Web site and variety of specialty publications such as show dailies. He manages a staff of seven reporters...