Posted: Sun, Dec 15, 2002, 9:02 PM ET (0202 GMT)
Executives at three European satellite manufacturers are considering a merger to deal with the overcapacity in the commercial marketplace, the Financial Times reported Sunday. According to the report, Astrium, Alcatel Space, and Alenia Spazio are considering merging their satellite manufacturing operations into a single entity. The companies are also considering strategic alliances to work together on specific projects if a merger agreement cannot be reached. A sharp drop in commercial satellite orders — from 23 in 1999 to just six in 2002, according to the article — has created a situation where there is far more manufacturing capacity then there is demand for it. Negotiations, which have apparently been ongoing for months, have picked up in recent weeks because of a series of launch failures and canceled satellite orders. The two commercial satellites lost in the recent Proton and Ariane launch failures were built by Astrium and Alcatel, and Intelsat recently cancelled an order for one of two next-generation communications satellites Astrium was building.

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•  Financial Times article