Benzinga | Oct 5, 2020 05:42AM EDT

Comtech Telecommunications and Gilat Satellite Networks Terminate Merger Agreement, Settle Litigation; Comtech to Make $70M Payment to Gilat

Comtech Telecommunications Corp. (NASDAQ:CMTL) and Gilat Satellite Networks Ltd. (NASDAQ:GILT) announced today that the companies have agreed to terminate the merger agreement first announced on January 29, 2020 and have settled all pending litigation in the Delaware Court of Chancery. In connection with the termination and settlement agreement, Comtech has agreed to make a payment of $70.0 million to Gilat.

The merger termination and the settlement agreement have been approved by each company's board of directors and are effective immediately. The settlement calls for dismissal of the litigation, with prejudice. The trial of the litigation which was scheduled to begin today in Delaware Chancery Court was accordingly cancelled.

In a joint statement, Fred Kornberg, Comtech's Chairman and Chief Executive Officer, and Dov Baharav, Chairman of the Board of Gilat, said "While we both believed from the outset that the merger of these two great companies was a perfect marriage, the COVID-19 pandemic made the timing of the combination particularly challenging. We concluded, that under current conditions, the settlement is the best path forward for both companies and their respective stakeholders."