U.S. seen approving DigitalGlobe-GeoEye deal in mid-January
WASHINGTON Jan 8 (Reuters) - The U.S. Justice Department is expected to approve DigitalGlobe Inc's acquisition of smaller rival GeoEye Inc later this month, according to three sources familiar with the review.
Antitrust officials last month had raised critical questions about the proposed merger, which will leave the United States with only one commercial satellite imagery provider, but are now "inching forward to a positive approval," said one source, who was not authorized to speak publicly.
A second source said U.S. officials were not happy about the loss of a second source of the commercial imagery, but recognized that Pentagon budget cuts had undercut the business case for a second provider.
"All indications are that they going to hold their noses and approve it," said the source, who was also not authorized to speak publicly.
The sources said they expected the Justice Department to wrap up its review by mid-January, but cautioned that no final decision had been made.
The department's antitrust division also just got a new chief, William Baer, who was sworn in on Jan. 3, which could still delay the department's action.
Dougherty & Co published an investor note on Tuesday saying it did not expect the Justice Department to oppose the merger.
It noted that the launch of the Pleiades-2 imagery satellite by Astrium, a unit of European aerospace giant EADS, had underscored the fact that earth observation was a competitive global marketplace.
Dougherty said the merger could close in the first quarter, with DigitalGlobe expected to take up to three weeks to complete the financing needed.
It said shares of DigitalGlobe could rise after the merger wins government approval. DigitalGlobe shares closed 92 cents or 3.5 percent higher at $27.20 on the New York Stock Exchange on Tuesday, its highest level in two years.
GeoEye shares closed $1.31 or 4 percent higher at $33.99 on the Nasdaq exchange, its highest level since summer 2011.
DigitalGlobe announced in July that it would acquire GeoEye for $453 million to create the world's largest commercial satellite imagery provider. In October, DigitalGlobe raised its full-year sales forecast, citing increased sales of its satellite images to businesses and U.S. intelligence agencies.
DigitalGlobe and GeoEye shareholders approved the merger at separate meetings in December.
- Google bus blocked in San Francisco gentrification protest
- Tearful Thai PM urges protesters to take part in election
- North Korea's 'reign of terror' worries South's leader
- Chinese hackers spied on Europeans before G20 meeting: researcher
- Leaders gather, thousands sing in rain in farewell to Mandela |