EC Seeks More Data on Lockheed-Loral Merger

The European Commission, in an unexpected move, said Friday it needed more time to decide whether to clear Lockheed Martin Corp.’s proposed $9.1-billion acquisition of Loral Corp.

The announcement that the commission needed more information on the giant defense contractor’s plans surprised antitrust lawyers in Brussels who noted that it came three weeks after the operation was notified for clearance instead of a usual three days.

But lawyers were cautious about predicting whether this meant the blockbuster deal, which is also being vetted by the U.S. Federal Trade Commission, would be affected.

“This is most unusual. Usually the commission concludes within three days, not three weeks, whether it has enough information to carry out its assessment,” a senior lawyer said.

“But I have the feeling that the case is not going to cause any problems,” he added.

This is because under EU merger rules, which cover the Lockheed-Loral deal, the commission must decide within one month whether to clear a deal submitted to its jurisdiction or start an in-depth investigation. If it fails to decide, the deal could be deemed approved.

But other lawyers thought the commission was unlikely to expose itself to a legal challenge, which could follow if it ultimately blocked or set conditions on the deal.

“Maybe the notification is just incomplete as the commission said,” another lawyer said.

He noted that the deal involved the defense sector and it could be that the companies were withholding some sensitive information that the commission considered important for its assessment.

The spokesman said the deadline for a decision on whether to start a full investigation or clear the deal had been extended until March 27 because the notification was not complete.

Lockheed closed up 62.5 cents at $76.875; Loral shares were down 62.5 cents at $46.50. Both trade on the New York Stock Exchange.