Intelsat Ltd. has agreed to acquire Panamsat for $3.2 billion to create the world’s largest Fixed Satellite Services company.

The combined company, which will retain the name Intelsat, will operate a fleet of 53 satellites and generate more than $1.9 billion in annual revenue. Under the agreement, announced Aug. 29, shareholders of Panamsat Holding Corp. will receive $25 per share, nearly 40 percent above the company’s March initial public offering price. Intelsat also will assume $3.2 billion in debt held by Panamsat and its subsidiaries.

“We have very complementary businesses,” David McGlade, CEO of Intelsat, said in an Aug. 29 conference call. “While Intelsat is very strong around the world in networks, Panamsat has a strong presence in the Americas with their video business. We feel from a product standpoint there is not too much overlap, and in customers there is very little overlap. We feel we’re in a position not to have to divest satellites and will take that position with regulatory authorities.”

McGlade, who will lead the new entity as CEO and director. Panamsat CEO Joseph Wright will become chairman of the board. “We were convinced each company could have carried on individually, but instead we have taken this ability to combine and create a premier company that will be good for everybody,” Wright said.

The combined companies also will work on developing other offerings such as Internet protocol TV (IPTV), said Wright. “This is going to be a growth area in the United states,” he said. “It’s going to change to a larger extent how consumers get their video coverage, as well as how they get telephony and data. Our two companies together will bring those products and services to the market.”

Intelsat’s deal with Panamsat trumps a reported combination with New Skies Satellites. “We have conversations with a number of operators,” McGlade said. “They have been ongoing. We are announcing our merger with Panamsat. We think this is the best combination for Intelsat.”

The deal is expected to close by August 2006, dependent on U.S. government approval.