DOJ blocks CPI’s acquisition of General Dynamics’ satellite antenna business (Image Credit: SNN)
SATCOM Technologies product lineup. Charge: General Dynamics Mission Systems
For the merger to go forward CPI must sell off its subsidiary ASC Signal Division.
WASHINGTON — The Department of Justice announced on May 28 that it will not permit satellite communications provider CPI unless CPI sells off its subsidiary ASC Signal Division to acquire General Dynamics SATCOM Technologies.
The divestiture is necessary to maintain competition for big satellite ground station antennas for geostationary satellites in the USA, DOJ said in a statement.
California-based CPI, short for Power & Communications Industries, declared in August 2019 its aim to buy the antenna systems firm of General Dynamics Mission Systems, SATCOM Technologies.
SATCOM Technologies designs, manufactures and installs satellite communications antenna systems used in scientific, defense and commercial applications. CPI said this acquisition would match the existing portfolio of military government and commercial products of CPI.
The merger was expected to close by the end of 2019 but the DOJ antitrust review concluded that the proposed acquisition would substantially lessen competition for the sale of large geostationary satellite antennas which are”an essential part of government, military and commercial satellite communication systems,” said Assistant Attorney General Makan Delrahim of this Justice Department’s Antitrust Division.
DOJ said CPI must divest ASC Signal Division before it could proceed with the acquisition of General Dynamics SATCOM Technologies. Including ASC’s facilities in Texas and Ontario, other assets related to big geostationary satellite antennas, as well as Canada.
At precisely the same period, a proposed settlement filed which, if approved by the court, would resolve the competitive harm.
The proposed settlement,” said Delrahim,”will make sure that the Department of Defense and other buyers of big geostationary satellite antennas continue to profit from vigorous competition in the design, manufacture, and sale of these products.”
According to the Justice Department’s complaint, CPI and General Dynamics SATCOM Technologies are two of only a few firms that manufacture, design and sell large satellite antennas.