Summary
Globalstar, Inc. (GSAT) has entered into a definitive Agreement and Plan of Merger with Amazon.com, Inc. (Amazon) and its subsidiaries. This transaction will involve a two-step merger where Globalstar will ultimately become a wholly-owned subsidiary of Amazon. The transaction is structured as a reorganization, intended to qualify under Section 368(a) of the U.S. Internal Revenue Code. The Globalstar Board of Directors, following unanimous recommendation from its Special Committee, has approved the merger and recommends its adoption by stockholders. Notably, a significant shareholder, Thermo Funding II, LLC, holding approximately 57.6% of Globalstar's common stock, has already executed a written consent to adopt the merger agreement, satisfying the required stockholder approval. The merger consideration offers stockholders a choice between cash and Amazon common stock. Each share of Globalstar common stock will be converted into either $90.00 per share in cash (subject to adjustments and proration) or a specified number of Amazon common stock shares based on a volume-weighted average price of Amazon's stock. A 40% cap is in place for cash elections, meaning that if more than 40% of shares elect cash, those elections will be subject to proration, with the remainder receiving stock. The transaction is subject to customary closing conditions, including regulatory approvals, and has an outside termination date of April 13, 2028. This acquisition marks a significant event for Globalstar shareholders and the telecommunications sector.
Key Highlights
- 1Globalstar, Inc. has agreed to be acquired by Amazon.com, Inc. through a two-step merger process.
- 2The merger is intended to qualify as a tax-free reorganization under Section 368(a) of the U.S. Internal Revenue Code.
- 3Globalstar's Board of Directors has unanimously approved the merger, and its Special Committee has recommended it as fair and in the best interests of stockholders.
- 4Thermo Funding II, LLC, a major shareholder (57.6%), has already provided written consent to approve the merger, satisfying the stockholder approval requirement.
- 5Globalstar shareholders can elect to receive either $90.00 per share in cash (subject to proration if more than 40% of shares elect cash) or shares of Amazon common stock.
- 6The Exchange Ratio for stock consideration is dependent on Amazon's stock price performance.
- 7The merger is contingent upon customary closing conditions, including regulatory approvals (e.g., HSR Act) and the absence of material adverse effects.