COMBINATION OF SES AND GE AMERICOM CREATES THE WORLD'S PREMIER SATELLITE SERVICES PROVIDER
SES Global to acquire GE Americom stock and other assets
in US$5 billion transaction
GE Capital to become a strategic shareholder in SES Global
The following joint statement is for immediate release:
- SES Global S.A. ("SES Global"), a newly formed company headquartered in Luxembourg, to acquire 100% of GE American Communications Inc., Princeton, NJ ("Americom") stock and other assets for US$5bn, consisting of US$2.7bn in cash and 15.4mn shares in SES Global.
- General Electric Capital Corporation ("GE Capital") to hold 25.1% economic interest and 20.1% voting interest in SES Global S.A.
- SES Global to acquire SES ASTRA in a 1:1 exchange offer to SES S.A. shareholders including FDR holders.
- SES Global will hold all SES Group participations, in particular SES ASTRA (100%), SES Americom (100%), SES Multimedia (100%), AsiaSat (34.10%), NSAB (50%), Star One (19.99%), and Americom's interests in Latin America and Asia.
- SES Global will become the world's premier broadband satellite services provider with a combined satellite fleet comprised of 28 wholly-owned satellites (11 ASTRA satellites and 17 Americom spacecraft) as well as 13 additional satellites through partnership and investment interests (3 AsiaSat, 3 SIRIUS, 5 Brasilsat and 2 other spacecraft through Americom's interests in Latin America and Asia).
- SES Global pro forma fiscal 2000 revenue totals EURO 1.410bn ($1.283bn) with EBITDA of EURO 1.179bn ($1.073bn; at an exchange rate of .91 US$ to the EURO).
- SES Global to finance the transaction through a combination of debt and new equity.
- New shares to be issued to Luxembourg public institutions to maintain their current level of economic and voting interest in SES Global.
- Discretionary international public equity offering planned combined with a listing on a US stock exchange. Free float of the enlarged company to be 25%.
- Enterprise value of SES Global upon completion approximately EURO 14bn.
- Transaction is subject to regulatory approvals.
A Great Strategic Fit
The transaction will combine the resources of two complementary satellite companies to create the premier global satellite services provider. The strengths of the new SES Global will include:
- Extensive geographic coverage - A truly global fleet of satellites covering Europe, the Americas and Asia as well as transoceanic capacity, offering seamless coverage and global connectivity.
- Strong regional presence - A combination of premier regional satellite companies operating satellites in orbital positions optimized for landmass coverage.
- Diverse customer base - ASTRA is a leader in DTH (direct-to-home) with strong relationships with European broadcasters. Americom has excellent relationships with North American broadcasters, cable programmers and private enterprises. Via holdings in Asia and Latin America, such relationships are extended to major players in these emerging markets.
- Comprehensive Services - The combined entity will offer a complete spectrum of broadcast, audio-visual, broadband, multimedia, IP-based and telecom services.
- Operational Excellence - SES is known for high quality and its technology-focused management team. Similarly, Americom operates one of the most reliable, high quality fleets in the industry with 8.7 Sigma availability.
Commenting on the agreement today, Romain Bausch, Director General and Chairman of the Management Committee of SES, said:
"The new SES Global organization will be well positioned to build the future of broadband satellite communications through a global satellite fleet. We welcome GE Capital as a strategic shareholder in SES Global. The relationship with GE is an ideal complement to our existing network of strong regional partners. The combination of global coverage and our unique regional presence gives us a distinct competitive edge to the advantage of our customers. In addition, Americom's culture of excellence is an ideal complement to SES' reputation for unparalleled performance."
Mr. Denis Nayden, Chairman and CEO of GE Capital, said:
"This is a best-in-class global combination for the satellite industry. The complementary fit of SES and Americom in terms of reach, customers, services and people make this a terrific growth opportunity for our companies. Our customers will also benefit from being able to transmit international content seamlessly through a fully integrated broadband satellite network. GE Capital is excited about the opportunity to become a strategic partner in SES Global and looks forward to the continued success of this entity."
A conference call for the international media will be held today at 11.00 am CET under the telephone number: 001 719 457 2629 - US only : 1 800 967 7140
If you're unable to join the teleconference, a replay facility will be available on the following number: 001 719 457 0820 or 888 203 1112 Media confirmation number: 775708
A conference call for investors and analysts will be held at 13.00 pm CET (12.00 noon London, 6.00 am New York time) under the telephone number: 001 719 457 2633 or 1 800 967 7184 Analyst replay: 888 203 1112 or 001 719 457 0820 - Analyst confirmation number: 542662
For further information please contact:
Société Européenne des Satellites S.A.
Investors:
Mark Roberts
Investor Relations Manager
Tel. +352 710 72 5490
Mark_Roberts@ses-astra.com
Media:
Yves Feltes
Press Relations Manager
Tel. +352 710 72 5311
Yves_Feltes@ses-astra.comGavin Anderson & Company, London
Byron Ousey
Tel. +44 20 7496 1446
bousey@gavinanderson.co.uk
GE Capital
U.S.:
Marissa Moretti
Press Relations Manager
Tel. +1-203-961-2290
Marissa.moretti@gecapital.comEurope:
Alex Moore
Hill & Knowlton
Tel. +44 20 7973 4412
Amoore@hillandknowlton.com
Transaction overview
Under the terms of the agreement, which has been approved by the Boards of Directors of SES and GE Capital, SES Global, a newly formed company headquartered in Luxembourg, will acquire 100% of Americom stock and other assets and liabilities for US$5bn. SES' Board of Directors, the members of which have been nominated by institutions whose shareholdings account for 72% of SES' shares, has unanimously approved the transaction.
GE Capital and other GE entities will contribute the stock of Americom and will sell other assets and liabilities to SES Global in exchange for US$2.683bn in cash and 15,431,752 SES Global shares.
SES Global will issue 15,431,752 shares to GE Capital in this transaction in the event that SES' share price is between EURO 110 and EURO 188 as measured at closing. At prices above EURO 188, SES retains the incremental value by a combination of issuing fewer shares and paying less cash. At prices below EURO 110 but not less than EURO 86, SES will make whole the value of GE Capital's equity to the EURO 110 level by issuing more shares or paying additional cash.
SES Global will also acquire SES ASTRA in a 1 to 1 exchange offer to SES S.A. shareholders. The transaction is expected to close prior to year-end 2001, conditional upon acceptance by shareholders representing 80% of the voting rights of SES S.A., and after appropriate regulatory approvals.
SES Global will finance the transaction through a combination of debt and new equity. Deutsche Bank AG, Dresdner Kleinwort Wasserstein and Morgan Stanley Dean Witter have underwritten medium and long term funding for the required cash portion of the acquisition and for the SES Global financing needs.
New shares will be issued to Luxembourg public institutions, which will retain their current level of economic and voting interest in SES Global. A discretionary international public equity offering is planned, combined with a listing on a US stock exchange, which will bring the free float of the enlarged company to 25%.
At closing of the transaction, GE Capital will have the right to three members of the SES Global Board of Directors, including one Vice Chairman.
The transaction will create the world's premier satellite operator with a footprint and asset quality unmatched by any other satellite operator. In 2000, the combined group reported pro forma revenues of EURO 1.410bn ($1.283bn) with EBITDA of EURO 1.179bn ($1.073bn).
Pro forma financial data
SES' acquisition of Americom stock and other assets combines two financially strong satellite operators with comparably high EBITDA margins and attractive growth prospects.
SES Global pro forma fiscal 2000 revenue of EURO 1.410bn ($1.283bn) and EBITDA of EURO 1.179bn ($1.073bn) creates the premier satellite operator in the world, with EBITDA margins in excess of 80%. SES reported on March 19th, 2001 its fiscal 2000 figures with Group revenues of EURO 835.9mn and EBITDA of EURO 708.7mn. Americom reported revenues of $522mn and EBITDA of $428mn for the period ended December 31, 2000.
The transaction improves cash earnings per share in the first years of the acquisition, prior to accounting for combination benefits. The pro forma company will seek to achieve an Investment Grade profile based on the business and financial strength of the combined entity.
The combination will result in an optimization of the respective capital expenditure programs, increased revenue potential, mainly because of one-stop-shop opportunity and global coverage, improved service offerings, operational synergies, and an improved risk profile.
SES' financial advisors on this transaction were Deutsche Bank, Dresdner Kleinwort Wasserstein, Morgan Stanley Dean Witter and Touchstone Securities Ltd. SES' legal advisers were Paul, Weiss, Rifkind, Wharton and Garrison; Freshfields, Bruckhaus, Deringer; and Arendt & Medernach. GE Capital's financial advisor was Merrill Lynch and legal advisers were Cravath, Swaine & Moore; Cahill Gordon & Reindel, and Elvinger, Hoss et Prussen.
About GE Americom
GE American Communications, Inc. ("Americom") is recognized as a pioneer and leading provider of global satellite communications solutions with over twenty-five years' experience. Americom is able to provide end-to-end telecommunications solutions to any region in the world through a fleet of 17 wholly-owned satellites. Americom's key customers include ABC Radio Networks, AT&T Alascom, British Telecom, Cidera, Deutsche Welle, Discovery, Disney, Gannett, ICG, Merlin, NBC, the New York Times, NHK, PaxNet, PBS, TELE Greenland, TV Europa, Viacom and AOL/TimeWarner.
Americom operates 13 communications satellites with 687 utilized transponders over North America. GE Americom currently reaches approximately 115mn subscribers through its satellites and serves an array of high-quality customers.
Americom has also established certain international operations:
- 1 satellite in Europe through co-ownership with NSAB
- 1 satellite in Asia Pacific through a joint venture with Lockheed Martin
- 1 satellite in Latin America through a stake in Nahuelsat
- 4 satellites for trans-oceanic satellite services acquired from Columbia Communications
The Company maintains a supporting network of earth stations, central terminal offices, and telemetry, tracking and control facilities.
In the year ended December 2000, Americom had revenues of $522mn, EBITDA of $428mn and operating income of $282mn with an EBITDA margin of 82.0% and 325 employees. Its contracted backlog amounts to $2.14bn.
GE Americom is a GE Capital company. GE Capital, with assets of more than US$370 billion, is a global, diversified financial services company grouped into six key operating segments comprised of 24 businesses. A wholly owned subsidiary of General Electric Company, GE Capital, based in Stamford, Connecticut, provides a variety of consumer services, such as credit cards and life and auto insurance; mid-market financing; specialized financing; specialty insurance; equipment management, and specialized services, to businesses and individuals in 47 countries around the world. GE is a diversified services, technology and manufacturing company with operations worldwide.
Additional information under: www.geamericom.com
About SES Group
The SES Group operates a satellite services network spanning four continents, providing seamless broadband communications for its customers. Based in Luxembourg, Société Européenne des Satellites S.A. (Luxembourg Stock Exchange: SES; Frankfurt Exchange: SDSL) is the operator of ASTRA, Europe's leading direct-to-home Satellite System, and the company holds strategic interests in premier satellite operations in Europe and across the world: NSAB (50%), AsiaSat (34.10%) and Star One (19.99%).
In the year ended December 2000, SES had revenues of EURO 835.9mn, EBITDA of EURO 708.7mn and operating income of 516.6mn with an EBITDA margin of 84.8% and 426 employees (including AsiaSat). Its contracted backlog amounts to EURO 4.6bn.
NSAB operates the SIRIUS satellites providing audiovisual and multimedia services to more than 2 million homes in the Northern and Eastern European countries as well as VSAT and telecommunications services. AsiaSat is the leading satellite system in the Asian/Pacific region reaching over 80 million households with more than 300 million viewers. Star One operates Brasilsat, the largest satellite fleet over Latin America. Audiovisual broadcasts via Brasilsat are received by more than 7 million households in Brazil.
Through its strategic investments in AsiaSat, NSAB and Star One, SES is interconnecting the European ASTRA and SIRIUS satellites with the Asian/Pacific AsiaSats and the Latin American Brasilsats in order to provide seamless global connectivity.
SES' core business builds on ASTRA, Europe's leading direct-to-home satellite system. Via eleven active satellites at the orbital positions of 19.2° East and 28.2° East, ASTRA transmits in analogue and digital format over 1000 television and radio channels as well as multimedia and Internet services to an audience of more than 87 million homes in Europe. Three additional ASTRA satellites are currently under construction and due for launch before mid 2002. Of these, ASTRA 3A will be permanently positioned at SES' 3rd orbital position at 23.5° East.
SES is a pioneer of satellite broadband services through SES Multimedia, a wholly-owned subsidiary. SES Multimedia operates the ASTRA-NET platform, enabling service and content providers to transmit data directly, via satellite, to personal computers in businesses and homes across Europe. In addition, SES is extending its direct involvement in multimedia with partnerships, joint ventures and direct investment.
SES is the first European satellite operator to commercially exploit the Ka-band frequencies for interactive broadband services in Europe. In Q4 2000, SES commenced commercial Beta trials of the Broadband Interactive System, a DVB-RCS based broadband satellite return channel system, serving the growing market in Western and Central Europe for 2-way asymmetric, high-speed broadband collection and delivery of multimedia content.
For additional information about SES Group and its partners visit: www.ses-astra.com, www.nsab.se, www.asiasat.com, and www.starone.com.br.
Statements in this announcement relating to future status and circumstances, including statements regarding plans and objectives of management for future operations, products and services, are forward looking statements of goals and expectations based on estimates and the anticipated effects of future events on current and developing circumstances and are not necessarily predictive of future results. Actual results may differ materially depending on such factors as availability of resources, changes in general economic and business conditions, government regulatory actions, competition, and general business, technical, and other risks related to the pro forma Company's business and operating environment.