BRUSSELS (Bloomberg) ? SES Global SA, the world's largest satellite broadcaster, will buy competitor New Skies Satellites Holdings Ltd. for $760 million to expand coverage in Asia and services to clients including the US Department of Defence.

SES, based in Betzdorf, Luxembourg, offered $22.52 in cash for each New Skies share, and will take over $400 million in debt, SES chief executive officer Romain Bausch said on a conference call on Wednesday. The offer price was 4.2 percent less than New Skies's closing share price of $23.50 in the US.

The combination may help SES weather increased competition as the industry consolidates. Intelsat Ltd. in August agreed to buy PanAmSat for $3.2 billion to create the world's largest commercial satellite operator. New Skies, controlled by New York-based private-equity firm Blackstone Group LP, raised $196.4 million in an initial public offering in May.

"It's in part defensive to enable them to better compete in the government services sector," said Mathieu Robilliard, an analyst at Exane BNP Paribas who has a 'neutral' rating on SES stock. "SES also gets market exposure to high-growth areas in the emerging markets. They will be able to extract synergies."

New Skies, based in Hamilton, Bermuda and with its main operating unit in The Hague, is the world's fifth-largest satellite operator based on transponder capacity. It has five spacecraft and will launch a sixth next year. The company posted sales of $232.9 million in the year through September 30.

"If you look at the footprint of New Skies' satellites, these are nicely covering pan-Asia, Europe, Africa and Latin America," Bausch said on the call. "There are few overlaps."

New Skies, which employs 200 people, will continue to operate from The Hague, Bausch said. New Skies chief executive officer Dan Goldberg said on the same call that he'll stay at the merged company. The combination will create cost savings of between $20 million and $30 million, Bausch said.

The transaction, which needs approval from New Skies shareholders and regulators including the US Federal Communications Commission, is expected to be completed in six months, SES said. About 55 percent of New Skies shareholders agreed to vote in favour of the deal, SES said.

Under the purchase agreement, New Skies will terminate its quarterly dividend programme after a fourth-quarter payment.

Blackstone bought New Skies in November last year for $982.8 million. The buyout firm currently holds a 55.6 percent stake, said New Skies chief financial officer Andrew Browne.

Satellite companies are attractive investments for buyout firms because of their ability to generate cash, which can be used to repay debt assumed in the purchases.

Buyout companies, which often hold their investments for three to seven years or more, have recently been able to sell them more quickly, sometimes within months.

Buyout firms including Kohlberg Kravis Roberts & Co. and Carlyle Group quadrupled their investment in PanAmSat, which agreed to be sold for $3.2 billion to Intelsat in August.