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So what: The deal is valued at $900 million and will create the largest satellite-imagery company in the world. That price also puts a 34% premium on GeoEye shares. By acquiring GeoEye, DigitalGlobe will diversify its business away from government contracts, which have been the bulk of sales.
Now what: DigitalGlobe CEO Jeff Tarr will lead the combined company, and he expects the transaction to close later this year or early next year. The combined company will retain the DigitalGlobe name. Interestingly, DigitalGlobe had previously spurned a takeover offer from GeoEye for roughly $800 million. Cost-saving synergies are valued at $1.5 billion over two years. Sector consolidation is the name of the game.
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