Boeing gobbles up Hughes' Defense satellite biz

Hughes Electronics Corp. announced last week that it plans to sell its satellite systems division to Boeing Co. and exit the defense and space market.

Included in the $3.75 billion acquisition is Hughes Space and Communications Co., Hughes Electron Dynamics and the Hughes Spectrolab. The sale, which is expected to close later this year, does not include Hughes' federal Internet or ground system support services.

Hughes will focus on its entertainment and data information divisions. It will also devote its resources to the integration of broadband networks and interactive services, according to Richard Dore, a Hughes spokesman.

The Hughes' acquisition comes shortly after Boeing re-entered the federal satellite market with the award in September 1999 of the intelligence community's Future Imagery Architecture (FIA) project. The transaction is expected to increase Boeing's space and communications revenue "by more than a third" and is "a significant step in executing [Boeing's] goal of becoming the industry leader in integrated, space-based information and communications," Phil Conduit, Boeing chairman and chief executive officer said in a prepared statement.

Hughes' experience as a federal contractor spans more than three decades. The company participated in the Apollo 11 mission in 1969 and developed the first geosynchronous communications satellite in 1961. Hughes' Spectrolab, which builds solar cells, solar panels and solar simulators, worked with the space department to launch the Pioneer 1 in 1958 and the Explorer 6 satellite in 1959.

Hughes currently has contracts with NASA and the National Oceanic and Atmospheric Administration to build nine Geostationary Operational Environmental Satellites to monitor weather patterns and provide severe storm warnings. The company also is participating in NASA's Tracking and Data Relay Satellite projects and the International Space Station.

Hughes also has satellite contracts with the Air Force and Navy.

Boeing will take over, maintain and complete Hughes' satellite and space contracts, a spokesman said.