Hughes to Buy PanAmSat for $3 Billion

PanAmSat Corp. is expected to announce this morning that it will sell the company to General Motors Corp.’s Hughes Electronics Corp. for $3 billion, a person familiar with the negotiations said.

PanAmSat will hold a news conference to discuss the sale and the announcement will be made before the markets open for trading, the source said.

Hughes would control about 70% of a new satellite services company that it would form after buying Greenwich, Conn.-based PanAmSat, one of the world’s biggest satellite-television companies, the Wall Street Journal reported.

Shares of PanAmSat rose $1 to $27.75 in trading of 1.33 million, more than seven times the three-month daily average of 177,900. Hughes’ shares (General Motors Class H) rose 75 cents to $57.75 in trading of 233,500, less than the three-month daily average of 283,100.

The purchase would expand Hughes’ web of communications satellites worldwide and possibly boost sales of its direct-to-home television service, DirecTV, which dominates the U.S. market. Hughes is the No. 1 satellite maker in the U.S.

PanAmSat shareholders would receive about $30 a share in cash and stock, the source said. Fred Landman, chief executive of PanAmSat, would be in charge of the satellite company.