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Justice Department Approves DigitalGlobe-GeoEye Merger

DigitalGlobe's WorldView-2 high-resolution imaging satellite. Credit: DigitalGlobe photo

WASHINGTON — The U.S. Department of Justice has cleared imaging satellite operator DigitalGlobe’s proposed acquisition of rival GeoEye, which was announced in July, DigitalGlobe announced Jan. 9.

Justice’s decision not to challenge the transaction on antitrust grounds is a major step toward final approval of the combination of the two dominant U.S. satellite imaging companies. Shareholders of the two companies approved the merger, driven by a decline in U.S. government spending on commercial satellite imagery, in December.

“Completion of the transaction is subject to satisfaction of other customary closing conditions, including obtaining regulatory approval from the Federal Communications Commission (FCC) and the National Oceanic and Atmospheric Administration (NOAA),” Longmont, Colo.-based DigitalGlobe said in a press release. “DigitalGlobe is working cooperatively with the FCC and NOAA, and the transaction is expected to close by January 31, 2013.”

DigitalGlobe and GeoEye had originally expected the deal to close before the end of 2012. 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.

Simultaneous with the closure of the merger, DigitalGlobe expects to complete a $1.2 billion refinancing package, the company said.

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