Spectrum Internet and SpaceX are expected to announce a $4 billion deal this week to acquire satellite operator Spectrum Communications for $1.5 billion, the company said on Thursday.
Spectrum Communications, which provides Internet and TV services to businesses and governments, is one of the nation’s leading satellite operators.
The company’s shares fell more than 6% in after-hours trading, to $7.83 a share, after the announcement was made.
The acquisition will give Spectrum Communications an additional $600 million in cash to support its businesses, the companies said in a joint statement.
Spectrum said it plans to use the cash to help pay down debt.
“Spectrum’s focus is on providing the greatest possible value to customers and the world at large, and we are confident that this transaction will further strengthen our business and accelerate our growth,” Spectrum CEO Michael Vadon said in the statement.
“We look forward to partnering with Spectrum on this important and unique transaction, which will strengthen our portfolio of spectrum and other assets.”
Spectrum will pay Spectrum Communications $1,300 a share in cash and stock in the deal.
The deal is subject to regulatory approval, and Spectrum will continue to operate under the Spectrum brand and name.