Under terms of the agreement, Verizon will pay $12 for each Hughes share, a 176% premium on the company’s over-the-counter shares, Reuters noted. The transaction is expected to finalize in the third quarter.
Shares of Verizon fell more than 1% in Friday afternoon trading in a sharply lower market.
Hughes provides GPS-based tracking and wireless communications systems used by manufacturers, fleets operators, vehicle dealers and consumers. Verizon officials said combining its existing enterprise systems with Hughes’ service-delivery platform would allow the company to offer services beyond the transportation sector.
After the merger, Hughes will become a subsidiary in Verizon’s Enterprise Solutions unit. The company’s current management team will remain in place.
UBS Investment Bank (NYSE:UBS) provided guidance for Verizon during the deal’s negotiations. The acquisition must still clear federal anti-trust regulators.