Exhibit 99
For Immediate Release
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LOCKHEED MARTIN - COMSAT TO COMBINE
ACTION BOOSTS WORLDWIDE COMPETITION,
BENEFIT USERS OF GLOBAL TELECOMMUNICATIONS SERVICES
BETHESDA, Maryland, September 20, 1998 -- The boards of directors of Lockheed
Martin Corporation (NYSE:LMT) and COMSAT Corporation (NYSE:CQ) jointly
announced today their two companies have entered into a definitive merger
agreement providing for the combination of COMSAT with Lockheed Martin in a two-
phase transaction valued at approximately $2.7 billion. Upon completion of the
transaction, COMSAT will become an integral element of Lockheed Martin Global
Telecommunications, a wholly owned subsidiary recently formed to provide
satellite network-based solutions and develop terrestrial networking
technologies for corporate and government customers worldwide.
In the first phase of the transaction, Lockheed Martin within five business days
will begin a cash tender offer to purchase up to 49% of the outstanding common
stock of COMSAT, at a price of $45.50 per share in cash, with an estimated value
of $1.3 billion. The tender offer will be made only pursuant to definitive
offering materials to be filed with the Securities & Exchange Commission and
mailed to all COMSAT shareholders. Lockheed Martin anticipates funding the
tender offer through monetization of a portion of its portfolio of equity
securities, depending on market conditions at the time of the close of the
tender offer.
This tender offer will be subject to certain conditions, including approval by
COMSAT shareholders, Federal Communications Commission (FCC) approval of a
merger of a common carrier subsidiary of COMSAT into a Lockheed Martin
subsidiary, and FCC designation of that Lockheed Martin subsidiary as an
"authorized carrier" under the 1962 Communications Satellite Act. The companies
anticipate the approval process will take approximately six to nine months.
The transaction's second phase, the merger of a second Lockheed Martin
subsidiary and COMSAT, is contingent upon the satisfaction of certain
conditions, including enactment of federal legislation to remove the existing
restrictions on authorized carrier ownership of COMSAT voting stock.
Legislation addressing the ownership cap already has been introduced in
Congress. This merger will be
accomplished by an exchange of Lockheed Martin common stock for COMSAT common
stock at a ratio of 0.5. This phase of the transaction is valued at
approximately $1.4 billion, based on recent market prices for Lockheed Martin
common stock.
Vance Coffman, Lockheed Martin chairman and CEO, said, "This initiative will
unite two advanced-technology companies with complementary capabilities in the
commercial, space-based telecommunications industry. The new subsidiary will
benefit communications users in the United States and around the world by
creating a dynamic new global competitor. Ultimately, it is anticipated that
Lockheed Martin Global Telecommunications will access the public equity
markets."
Based in Bethesda, Maryland, COMSAT focuses on two lines of business:
international satellite communications services and digital networking services
and technology. COMSAT is the U.S. signatory to the International
Telecommunications Satellite Organization (INTELSAT), a 143-member nation
organization that serves more than 180 countries, and the International Mobile
Satellite Organization (Inmarsat), which provides mobile satellite
communications worldwide, and is the largest provider of space segment capacity
in these organizations.
COMSAT offers voice, data and video transmission services for its customers,
which include telecommunications carriers, private-network providers,
multinational corporations, the U.S. government and a variety of broadcasting
organizations. COMSAT's digital networking services business operates in 11
countries, and provides its customers in rapidly growing international markets
with start-to-finish networking solutions. COMSAT employs some 1,700 people.
COMSAT's president and chief executive officer, Betty C. Alewine, said, "This
agreement gives value to our shareholders, offers opportunities for our
employees and adds competition to the marketplace. Working together, Lockheed
Martin and COMSAT will meet the exploding demand for broadband, Internet and
virtual private network services. Today, COMSAT has found a partner that shares
its vision for the future of privatized international telecommunications. Our
partnership will expand competition in this market to the benefit of customers
and the industry."
Lockheed Martin's new Global Telecommunications subsidiary comprises Lockheed
Martin Intersputnik, a joint venture between Lockheed Martin and Moscow-based
Intersputnik that is scheduled to deploy its first satellite early in 1999;
AstrolinkTM System, a Lockheed Martin strategic venture that will provide global
interactive multimedia services using next-generation broadband satellite
technology; Communications Systems, which markets commercial satellite
communications systems capabilities,
including network engineering and systems integration expertise; and Lockheed
Martin's joint venture with GE Americom that is scheduled to launch a satellite
next year that will service broadcasters in the Asia-Pacific region.
John V. Sponyoe, Lockheed Martin Global Telecommunications' chief executive
officer, said "This combination accelerates the momentum of Global
Telecommunications in its evolution into an enterprise well-positioned to
quickly become a premier global communications network service provider, a
market expected to grow from some $50 billion today to $120 billion by the year
2002.
"Our combined space-based infrastructure will enable us to deliver uniform
global coverage and capabilities for Internet and network service providers,
broadcasters and multi-national corporations -- literally any time and anywhere.
"Just as importantly, Lockheed Martin Global Telecommunications and COMSAT are
committed to achieving timely, pro-competitive privatization of INTELSAT and
Inmarsat," Sponyoe said.
Bear, Stearns & Co., Inc., is financial advisor to Lockheed Martin, will act as
dealer manager in connection with the tender offer, and also rendered a fairness
opinion. Donaldson, Lufkin & Jenrette Securities Corporation is financial
advisor to COMSAT and rendered a fairness opinion to COMSAT's board of
directors.
Headquartered in Bethesda, Maryland, Lockheed Martin is a highly diversified
enterprise principally engaged in the research, design, development, manufacture
and integration of advanced-technology systems, products and services. The
Corporation's primary businesses span space, telecommunications, electronics,
information and services, aeronautics, energy and systems integration.
Employing approximately 170,000 people worldwide, Lockheed Martin had 1997 sales
surpassing $28 billion.
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CONTACT: Media: Lockheed Martin News & Information, 301/897-6258, 6352 or 6230
COMSAT Corporate Affairs, 301/214-3442
Investors: Lockheed Martin Investor Relations, 301/897-6584 or 6455
Comsat Investor Relations: 301/214-3244
NOTE: Statements which are not historical facts are forward-looking statements
made pursuant to the safe harbor provision of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
anticipated results including the assumption that the combination is
consummated, effects of government budgets and requirements, economic
conditions, competitive environment, timing of awards and contracts; the outcome
of contingencies including litigation and environmental remediation, and program
performance in addition to other factors not listed. See in this regard the
Corporations' filings with the Securities and Exchange Commission. The
Corporations do not undertake any obligation to publicly release any revisions
to forward looking statements to reflect events or circumstances or changes in
expectations after the date of this press release or the occurrence of
anticipated events.