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Intelsat buys rival PanAmSat

Intelsat is acquiring a major rival, the PanAmSat Holding Corporation, creating one of the world’s largest operators of satellites that distribute data and video programming for broadcast clients. The companies want to receive regulatory approval for the deal in six to 12 months.

Intelsat, a private company, will pay $3.2 billion, or $25 a share, for PanAmSat. Intelsat will also take over $3.2 billion in PanAmSat’s debt.

The combined company will have 53 satellites — 28 from Intelsat and 25 from PanAmSat — and annual revenue of $1.9 billion.

The two companies have complementary businesses. Intelsat has large contracts with the United States government, and about half of PanAmSat’s revenue comes from providers of video programming such as Disney, Time Warner and HBO.

Intelsat is also strong outside the United States, while most of PanAmSat’s satellites are positioned over North America.

The deal is the latest in a rapidly consolidating industry. A glut of satellite launchings in the 1990s sent prices tumbling and pushed several big players into bankruptcy.

Though the PanAmSat sale is one of the largest takeovers in recent years, it is unlikely to be the last. There are still about three dozen satellite providers operating worldwide, which means there are too many players in a market that is no longer growing fast enough to sustain them all.

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