GeoEye and DigitalGlobe To Merge

The two U.S. commercial remote sensing satellite comanies, GeoEye and DigitalGlobe, announced this morning that they will merge. 

Coincidentally or not, the announcement comes on the 40th anniiversary of the Landsat land remote sensing satellite program that opened the era of civilian satellite remote sensing of the Earth’s resources.  An attempt to privatize Landsat in the Carter and Reagan Administrations failed, but opened the door to the commercial satelite remote sensing satellite business of today that provides imagery with much better resolution than Landsat.

DigitalGlobe and GeoEye each announced that the two companies would combine in a stock and cash transaction valued at about $900 million.  The combined company will retain the name DigitalGlobe.  The intial board of directors will have 10 members, six from DigitalGlobe and four from GeoEye.   Jeffrey Tarr will continue to President and CEO of the new DigitalGlobe.

The fate of the two companies has been the topic of much speculation since the Pentagon made clear in recent months that it would not provide as much funding to them as earlier expected.   The government is a major customer of both companies, which provide satellite imagery with resolution less than half a meter.   The National Geospatial-Intelligence Agency (NGA), which manages the EnhancedView contract through which it purchases imagery from the two companies, notified GeoEye last month that it would be funding only three months of the next 1-year contract option unless it received additional funds from Congress and would not be contributing its share to building the next GeoEye satellite.