Three companies from Europe and possibly one from Japan intend to buy a 49 percent stake in the civilian side of Ford Aerospace Corp., industry executives said yesterday.
The $182 million deal would give foreign investors their second important ownership role in the U.S. satellite industry.
"We would like to become a global company and we needed partners to do that," said Bernard L. Schwartz, chairman of Loral Corp. His U.S. defense and space technology company hopes to conclude the purchase of Ford Aerospace later this week and then plans to sell the 49 percent stake in its civilian operations.
Of the three major U.S. firms building commercial satellites, which handle jobs ranging from relaying phone calls to monitoring the weather, Ford Aerospace has been ranked as second or third in size, with $350 million in annual sales in the field. Schwartz said yesterday that the deal, which still must go through final negotiation and regulatory approval, would give it a leg up to compete in world markets.
Nonetheless, the deal could rekindle criticism from Capitol Hill and elsewhere that the United States is too quick to open up its technology companies to foreign investors and by doing so risks losing out to competitors abroad.
The deal follows the $245 million purchase earlier this year by the French aerospace concern Matra SA of the space and electronics divisions of Fairchild Industries Inc., which makes satellite components.
The United States pioneered the commercial satellite business in the 1960s. But in recent years it has watched as advanced players emerged in Europe and Japan, often with close government nurturing.
The European suitors for Ford Aerospace are Aerospatiale Societe Nationale Industrielle of France, Alcatel NV of the Netherlands and Selenia Spazio SpA of Italy. Schwartz said plans are for each to take a 15 percent stake, with a Japanese company that he declined to name being invited to take 4 percent.
Schwartz noted that Loral would retain control over the commercial division of Ford Aerospace by keeping 51 percent. Loral would keep all the military side of Ford Aerospace, he said. Schwartz and an executive at Aerospatiale said they foresaw no barriers based on concerns over foreign ownership. "Control of the company will remain with the U.S. partner," pointed out the Aerospatiale executive.
After winning a bid for Ford Aerospace this summer, Loral said it intended to keep it in one piece and that selling off parts was not necessary to finance the $715 million deal. Later, however, it moved to sell the company's research subsidiary, BDM International Corp. Yesterday Loral depicted the satellite deal as not a sale but rather a bringing in of partners that would be able to strengthen its business.
Joseph Pelton, a satellite specialist at the University of Colorado, said the sale would continue a trend toward international teaming in the highly exacting business of building satellites. "The U.S. has to actively seek international partnerships to be able to remain competitive in the 1990s," he said.
Industry analysts said the United States leads the world in satellite technology but that each year there is more it can learn from Europe. "Certainly there's an opportunity for two-way flow," said Scott Chase, editor of Via Satellite magazine, a trade journal.
Many stressed, however, that the greater importance of the deal will be that it opens access to other markets. Many government have traditionally blocked purchase of foreign satellites to nurture domestic manufacturers. Said Chase, "Ford becomes more palatable to Europeans with European partners."