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Boeing purchase of Hughes unit likely to win antitrust approval

SHARE Boeing purchase of Hughes unit likely to win antitrust approval

SEATTLE (Bloomberg) — Boeing Co.'s proposed purchase of Hughes Electronics Corp.'s satellite-making business is likely to win antitrust approval in both Europe and the U.S. after the company makes minor changes, the Wall Street Journal reported, citing unidentified company and government officials.

Regulators at the European Commission and at the U.S. Federal Trade Commission want to ensure that Boeing doesn't use Hughes's dominant position as the world's biggest satellite maker to push customers to its own launch vehicles.

Boeing, the world's largest aerospace company, agreed in January to buy the Hughes business for $3.75 billion. The European Commission, the executive arm of the 15-nation European Union, said in May that it was opening an extended probe into the transaction. Boeing declined to comment on whether specific concessions have been agreed upon with regulators.

"We're confident that the acquisition is going to be approved," said Rick Fuller, a Boeing spokesman. "We're working with officials in Europe and in the U.S. to address their concerns."

Boeing has told European officials that it will set up barriers between the satellite and rocket-launcher businesses, to prevent the exchange of certain kinds of information, the paper said.

European Commission spokeswoman Amelia Torres had no immediate comment on the case. Federal Trade Commission officials weren't immediately available to comment.

Federal Trade Commission lawyers may require Boeing to alert rival rocket companies and customers about design changes to Hughes satellites that could affect the way they're launched, the newspaper reported.

Analysts have said it's unlikely Boeing will have to divest any businesses to gain clearance. They noted that consolidation among major aerospace companies has already resulted in a concentration of launch, manufacturing and satellite-leasing capability into the hands of fewer companies.

Lockheed Martin Corp. is one of the world's largest makers of satellites and a top maker of launch vehicles. It gained satellite-leasing capacity through its recently completed purchase of Comsat Corp. Boeing also competes with Arianespace, a closely held satellite and rocket company owned by European countries and companies.