PARIS—Eutelsat Communications and OneWeb shareholders have signed a memorandum of understanding to merge the two companies in a $3.4 billion deal.
The deal could strengthen their ability to capitalize on the global race to provide satellite internet and to better compete against Elon Musk’s SpaceX and other companies in providing low-orbit satellite internet services.
If completed the deal would combine Eutelsat’s fleet of 36 GEO satellites with OneWeb’s constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.
The deal builds on deepening collaboration between Eutelsat and OneWeb in recent years. Eutelsat acquired an equity stake in OneWeb in April 2021, the two companies announced a global distribution agreement in March 2022, and a new exclusive commercial partnership signed as the deal was announced.
“I am delighted to announce this new and significant step in the collaboration between Eutelsat and OneWeb,” said Dominique D’Hinnin, Eutelsat’s chairman. “Bringing together our two businesses will deliver a global first, combining LEO constellations and GEO assets to seize the significant growth opportunity in Connectivity, and deliver to our customers solutions to their needs across an even wider range of applications. This combination will accelerate the commercialisation of OneWeb’s fleet, while enhancing the attractiveness of Eutelsat’s growth profile. In addition, the combination carries significant value creation potential, anchored on a balanced mix of revenue, cost and capex synergies. The strong support of strategic shareholders of both parties is a testament to the huge opportunity that this combination offers and the value that will be created for all its stakeholders. This is truly a game changer for our industry.”
“Having played a pioneering role in providing connectivity in the emerging world, I am excited about the possibilities of connecting the unconnected,” added Sunil Bharti Mittal, OneWeb’s executive chairman. “The combination of Eutelsat and OneWeb represents a significant development in that direction as well as a unique GEO/LEO combination. The positive early results of our service together with our strong pipeline represent a very exciting opportunity in the fast-growing satellite connectivity segment, especially for customers requiring a high speed, low latency experience. Our customers are actively seeking a combined GEO/LEO offering leading us towards this important step. Bharti, as the lead shareholder of OneWeb, along with other key shareholders, is looking forward to playing a meaningful role in providing expanded connectivity through the combination of OneWeb and Eutelsat.”
The two companies said that the transaction is expected to close by the end of the first half of 2023.
