PARIS — MDA Corp. of Canada and U.S. geospatial services provider DigitalGlobe on July 13 said they had withdrawn and then re-filed documents about their planned merger with the U.S. Committee on Foreign Investment in the United States (CFIUS) to give the committee additional time to assess the transaction for U.S. national security implications.
In a joint statement, the two companies did not disclose any specific issues that would require a longer-than-planned CFIUS review, or whether they had modified the transaction in any way to satisfy CFIUS. They said they still expected MDA’s purchase of DigitalGlobe to conclude by sometime this summer.
The companies had submitted a draft voluntary notice to CFIUS on March 24. A formal voluntary filing was made on April 12. On May 30, CFIUS said it was commencing a 45-day investigation into MDA’s purchase of the principal commercial geospatial imagery provider to the U.S. government.
Ini their July 13 statement, the companies said that once CFIUS signals formal acceptance of the new filing, the agency would begin a 30-day review.
The CFIUS review is needed because MDA is a Canadian company. But MDA has committed that post-acquisition, DigitalGlobe will be operated as “a stand-alone division under SSL MDA Holdings Inc., which is MDA’s U.S. operating subsidiary. DigitalGlobe will remain at its current headquarters in Westminster, Colorado.
MDA had already begun taking steps to make itself — and its Space Systems/Loral satellite manufacturing arm, based in California — more palatable to the U.S. government thorough a series of measures as part of MDA’s “U.S. Access Plan” strategy:
The measures include a layer of security protections to wall off SSL government work from the commercial part of the company.
MDA said SSL MDA Holdings would be incorporated in the United States by the end of 2019.
“Neither MDA nor DigitalGlobe believes that the merger poses a threat to national security,” MDA told its shareholders on June 21. “But there can be no assurance CFIUS will not conclude there is a national security risk associated with the merger and seek to challenge the transaction or require the parties to enter into a mitigation agreement.”
The two companies’ shareholders are scheduled to meet to approve the acquisition on July 27. The transaction, including cash and MDA stock, values DigitalGlobe at $2.4 billion.