Commercial remote-sensing satellite imagery providers DigitalGlobe and GeoEye announced they would merge in a cash-and-stock deal worth $453 million that would leave Longmont, Colo.-based DigitalGlobe operating the world’s largest fleet of commercial imagery satellites.

Under the agreement’s terms, DigitalGlobe is offering 34% more than the July 20 closing price of $15.17 per share for GeoEye stock, the companies said in a July 23 conference call with investors.

DigitalGlobe Chief Executive Jeffrey Tarr will head the new company with GeoEye CEO Matt O’Connell serving in an advisory role. Between them, the companies will have five satellites in orbit and two in the pipeline — DigitalGlobe’s WorldView-3, slated for launch in 2014, and GeoEye-2, which is nearing completion and expected to launch next year.

Tarr said the merger could yield an estimated $1.5 billion in future savings based on reduced satellite construction and launch costs. For the moment the companies are assuming a worst-case analysis going forward, a scenario in which government funding for GeoEye’s commercial imaging services is zeroed in fiscal 2013 and does not recover.

In that case, if the merger is approved either late this year or in early 2013, $1.5 billion in future savings could be realized in part by delaying the launch of one of the two satellites under construction and reserving it as a ground spare.

If demand for high-resolution commercial satellite imagery grows, DigitalGlobe would consider expanding the constellation by launching the spare satellite. “It increases our flexibility and reduces risk and optimizes capital expenditures,” Tarr said.

GeoEye made an unsuccessful bid to buy DigitalGlobe for $792 million earlier this year. GeoEye’s future was then thrown into doubt in June when the National Geospatial-Intelligence Agency informed the company that its current EnhancedView service contract was being truncated, and the agency would provide no more money for the development of GeoEye-2 (Aerospace DAILY, May 8, June 25). DigitalGlobe’s NGA contracts were not altered.