(Reuters) - Satellite imagery provider DigitalGlobe Inc (DGI.N) said it received antitrust approval from the U.S. Department of Justice to buy smaller rival GeoEye Inc GEOY.O for $453 million.
The companies, the only two commercial providers of satellite imagery in the United States, agreed on a deal in July 2012, after months of bickering, to combat potential cuts to the U.S. defense budget.
The combination of the companies, which supply imagery to U.S. spy and military agencies and commercial customers such as Google Inc (GOOG.O) and Garmin Ltd (GRMN.O), will create the world’s largest provider of commercial satellite imagery.
Antitrust officials last month had raised critical questions about the proposed merger that will leave the United States with only one commercial satellite imagery provider, sources familiar with the matter told Reuters.
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, one of the sources said.
The deal, which was approved by DigitalGlobe and GeoEye shareholders at separate meetings in December, is expected to close by January 31.
The deal is yet to receive approval from the Federal Communications Commission and the National Oceanic and Atmospheric Administration.
DigitalGlobe shares, which have doubled in value since announcing the GeoEye buy, rose as much as 8 percent to $29.26 on Wednesday on the New York Stock Exchange.
GeoEye shares jumped 15 percent to $39.25 on the Nasdaq.
Reporting by A. Ananthalakshmi in Bangalore; Editing by Supriya Kurane