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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 allow satellite communications antenna provider CPI to acquire General Dynamics SATCOM Technologies unless CPI sells off its subsidiary ASC Signal Division.
The divestiture is necessary to preserve competition for large satellite ground station antennas for geostationary satellites in the United States, DOJ said in a statement.
California-based CPI, short for Communications & Power Industries, announced in August 2019 its intent to purchase SATCOM Technologies, the antenna systems business of General Dynamics Mission Systems.
SATCOM Technologies designs, manufactures and installs satellite communications antenna systems used in commercial, defense and scientific applications. CPI said this acquisition would complement CPI’s existing portfolio of government, military and commercial products.
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 component of government, military and commercial satellite communication networks,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
DOJ said CPI must divest ASC Signal Division before it can proceed with the acquisition of General Dynamics SATCOM Technologies. That includes ASC’s facilities in Texas and Ontario, Canada, as well as other assets related to large geostationary satellite antennas.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit on May 28 in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.
The proposed settlement, said Delrahim, “will ensure that the Department of Defense and other purchasers of large geostationary satellite antennas continue to benefit 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 design, manufacture and sell large geostationary satellite antennas.