In May this year two companies worth a combined $1.23 billion in market capitalization tendered hostile bids to buy each other. The bids were rejected, and confidential talks between the companies broke down in a rather unusual exchange of accusatory letters. One of the companies even highlighted weaknesses it saw in the other company’s SEC filing.

The two companies, DigitalGlobe and GeoEye, are key providers of satellite imagery to the United States intelligence community. They are also the subject of a paper I am writing with two colleagues, Sue Roberts and Ate Poorthuis at UKY on the intelligence contracting industry.

At 8:30am this morning the two companies held a conference call to announce that DigitalGlobe was buying GeoEye. This means that there is now only one company (DigitalGlobe) building spy satellites in the USA. There is now effectively a monopoly on spy satellites. As of 10:30am DGI stock was down about 1%.

According…