Communications satellite operator Intelsat Ltd. (search) has agreed to acquire PanAmSat Holding Corp. (PA) for $3.2 billion, creating the world's largest commercial satellite fleet, the companies said on Monday.

Intelsat will pay $25 a share for PanAmSat, a roughly 25 percent premium over the stock's closing price on Friday and a 40 percent premium over its initial public offering price in March.

Intelsat will also refinance or assume about $3.2 billion of debt of PanAmSat and its subsidiaries.

Combined, the companies will have a fleet of 53 satellites to support fiber networks and operational capabilities for cable TV programmers, broadcasters, businesses and governments.

The deal will vault the merged company ahead of SES Global (search), which currently has the world's biggest satellite fleet.

The transaction has been approved unanimously by both boards of directors but requires PanAmSat shareholder approval. It also needs clearances from regulatory agencies, including U.S. government antitrust authorities and the Federal Communications Commission (search). The companies anticipate the transaction could close in six to 12 months.

PanAmSat went public in March, about seven months after it was taken private by an private investor group headed by Kohlberg Kravis Roberts & Co (search).

David McGlade, chief executive officer of Intelsat, will serve as CEO of the combined company; Joseph Wright, currently CEO of PanAmSat, is expected to become chairman, the companies said.

Intelsat said it has financing commitments for the deal from a group of financial institutions led by Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Credit Suisse First Boston LLC and Lehman Brothers Inc.

A portion of the financing is expected to be raised at Intelsat (Bermuda) Ltd., with additional financing expected to be raised at PanAmSat Holding Corp., PanAmSat Corp. and Intelsat Subsidiary Holding Co. Ltd.

On completion of the transaction, both PanAmSat Holding Corp. and Intelsat Subsidiary Holding Co. Ltd. will be directly or indirectly wholly-owned subsidiaries of Intelsat (Bermuda) Ltd.

PanAmSat Holding Corp. and its subsidiaries will continue as separate corporate entities.