In a filing to federal regulators yesterday, Lockheed Martin Corp. revealed a potential hitch in its plan to acquire Bethesda neighbor Comsat Corp.
The trouble centers on Lockheed Martin's relationship with Loral Space & Communications Ltd., in which it holds a 14 percent stake.
To allay antitrust concerns about its ownership of shares of two satellite communications companies, Lockheed was willing to enter a consent order on the terms of its sale of its Loral shares.
However, Lockheed said its entry into such a consent order was contingent on getting assurances from Loral on the conditions of the divestiture.
Lockheed said in its filing that it "has been unable to obtain these assurances."
This failure raises the prospect that Lockheed will not be able to satisfy regulators' concerns about its simultaneous ownership of stakes in Loral and Comsat.
Lockheed and Loral officials declined to comment on the matter. Comsat also declined to address the question of whether its proposed acquisition by Lockheed Martin is doomed.
If the tender offer is not completed by Sept. 18, either Lockheed or Comsat may terminate the merger agreement. The two companies could also amend the merger so that the offer could be completed after that date.
"We're obviously still working with the Department of Justice," said Comsat spokesman Jay Ziegler. "It would be speculative for me to comment at this time."
"We have complied with all of the information requirements of the Justice Department to ensure we have complied with the antitrust requirements," Ziegler said.
Lockheed Martin's plan to buy Comsat for $2.7 billion has been in an uncertain state ever since it was announced last Sept. 20. The deal requires the companies to surmount some unusually high hurdles, including persuading Congress to change the laws governing Comsat, which was founded as a quasi-governmental entity in 1962.
Bloomberg News contributed to this story.
Pub Date: 9/04/99