DOJ: Buyer of General Dynamics SATCOM Technologies must divest subsidiary to proceed with deal

By Marjorie Censer / May 29, 2020 at 12:22 PM

The Justice Department announced this week that Odyssey Investment Partners, its portfolio company Communications and Power Industries and General Dynamics must divest CPI subsidiary CPI ASC Signal Division to proceed with the planned acquisition of General Dynamics SATCOM Technologies.

"Without the divestiture, the proposed acquisition would substantially lessen competition for the sale of large geostationary satellite antennas in the United States," the department said, adding that CPI and GD SATCOM are two of only a few companies that design, build and sell these antennas.

The Justice Department noted that large geostationary satellite antennas are essential components of government, military and commercial satellite communication networks.

"The department's complaint alleges that competition between CPI and GD SATCOM has resulted in higher quality, lower prices, and shorter delivery times, and has fostered innovation, resulting in large geostationary satellite antennas that are more robust and operate at higher bandwidths," DOJ said. The "combination of CPI and GD SATCOM would leave customers, including the Department of Defense, without a competitive alternative for this critical component of communications networks and likely result in higher prices, less favorable contact terms, and reduced research and development efforts."

The settlement proposed by DOJ calls for Odyssey, CPI and General Dynamics to divest all of the ASC Signal subsidiary, including facilities in Texas and Canada and other assets.

"CPI is preparing to close expeditiously on the previously announced acquisition of the GD SATCOM Technologies business," a CPI spokeswoman told Inside Defense.

General Dynamics declined to comment.

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