Eutelsat and OneWeb discussing multi-orbit merger plan

TAMPA, Fla. — Eutelsat said July 25 it is in talks to merge with OneWeb to create a global multi-orbit satellite broadband operator.

The deal would combine France-based Eutelsat’s satellite fleet in geostationary orbit (GEO) with British startup OneWeb’s constellation in low Earth orbit (LEO).

Eutelsat already owns 23% of OneWeb, and has been building a position in the startup to strengthen connectivity services amid a gradual decline in its satellite TV business.

The combined company would be “the first multi-orbit satellite operator offering integrated GEO and LEO solutions,” Eutelsat said, targeting a satellite connectivity market projected to be worth $16 billion by 2030.

It comes amid plans for other multi-orbit combinations that seek synergies from integrating satellites operating in GEO and LEO. 

A satellite fixed in GEO can provide more capacity to a specific region than non-geostationary satellites in a megaconstellation that has to serve the entire globe. Constellations closer to the Earth, however, promise low-latency solutions that can integrate with terrestrial infrastructure more effectively.

Eutelsat’s European rival SES operates a satellite network in GEO and medium Earth orbit (MEO).

U.S.-based GEO broadband operator Viasat is in the middle of acquiring British satellite fleet operator Inmarsat, which has plans for satellites in LEO and highly elliptical orbit.

Canadian GEO operator Telesat plans to start deploying its delayed Lightspeed LEO constellation satellites in 2025. 

Intelsat had also tried to merge with OneWeb, but scrapped the deal in 2017 after failing to win support from debt holders to buy the company. 

Indian telecom company Bharti Global is OneWeb’s largest shareholder. Other shareholders include Japanese internet giant SoftBank, South Korean conglomerate Hanwha, U.S.-based Hughes Network Systems and the British government.

French state-owned investment bank Bpifrance is publicly listed Eutelsat’s largest shareholder. 

The Chinese government is Eutelsat’s fourth-largest shareholder via sovereign fund China Investment Corp, reported Reuters citing data from financial research firm Refinitiv.

Eutelsat and OneWeb shareholders would each get 50% of the combined company’s shares under terms of a deal currently being discussed, Eutelsat said.

OneWeb’s shareholders would contribute their stake in the startup to Eutelsat in exchange for newly issued shares in the French company.

A deal would require shareholder and regulatory approvals, including permission from foreign investment authorities. 

Talks about a potentially transformational deal come after Eutelsat’s board rejected an unsolicited $3.2 billion takeover attempt in September from Patrick Drahi, the billionaire magnate who founded multinational telecommunications firm Altice.

Former CEO Rodolphe Belmer announced plans a month later to leave Eutelsat after six years with the company. 

Eva Berneke, a technology and telecoms veteran who previously led Danish IT and software company KMD, took Eutelsat’s reins as CEO at the start of 2022.

Meanwhile, OneWeb has not been able to add satellites to its constellation since Russia’s invasion of Ukraine in February forced the company to halt the use of Soyuz vehicles. 

OneWeb currently has 428 satellites in LEO, about 66% of its planned feet, and has lined up missions with SpaceX and India’s space agency to resume launches later this year. 

The company expects to have deployed the remaining satellites by the end of 2023 to provide global connectivity services.

SpaceX’s has amassed more than 2,700 satellites in LEO for its Starlink broadband constellation as it expands global coverage, according to astronomer and spaceflight analyst Jonathan McDowell.

The latest batch of 53 Starlink satellites launched July 24 on a Falcon 9 rocket from Launch Complex 39A at the Kennedy Space Center, Florida.

Shares in Eutelsat fell more than 15% in trading early Monday on the Euronext exchange.

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