The U.S. Department of Justice's Antitrust Department (DOJ) required the divestiture of ASC Signal Division Inc., which is Communications and Power Industries LLC.’s (CPI) wholly-owned subsidiary, to approve the acquisition of General Dynamics SATCOM Technologies Inc. (General Dynamics) by CPI. DOJ stated that if the divestiture does not take place, the merger will significantly reduce competition in the relevant market.
DOJ filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger. In addition, DOJ offered a proposal in order to overcome the competition concerns. According to DOJ’s complaint, CPI and General Dynamics are two of only a few firms that design, manufacture, and sell large geostationary satellite antennas. With the end of the competition between the parties as a result of the merger, consumers will face higher prices, less favorable contact terms, and reduced research and development efforts.
As a result, DOJ determined that the CPI and General Dynamics must divest the entirety of CPI’s ASC Signal subsidiary, including its facilities in Texas and Ontario, Canada, as well as other assets related to large geostationary satellite antennas to address these competition concerns. (DOJ – 28.05.2020)
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