Eutelsat is set OneWeb
According to two sources close to the negotiations, French satellite company Eutelsat is set to acquire British rival OneWeb in a deal that could be announced as early as Monday.
According to one of the sources, OneWeb was valued at $3.4 billion in its most recent funding round. Eutelsat already owns 23% of OneWeb and is its second-largest shareholder.
The merger would strengthen the two companies’ position in the race to build a constellation of low-orbit satellites, competing with Elon Musk’s SpaceX’s Starlink and Amazon.com Inc’s Project Kuiper.
After recent sanctions crippled Russia’s space launch industry, demand for satellite launches is expected to rise, and giant satellite constellations could provide a new channel for beaming broadband internet from space.
The merger is politically sensitive because it would bring together Indian billionaire Sunil Bharti Mittal, France, China, and the United Kingdom as shareholders in the combined entity. OneWeb’s largest shareholder is Bharti Global.
With a 20% stake, France’s state-owned investment bank Bpifrance is Eutelsat’s largest shareholder. According to Refinitiv data, China‘s sovereign fund China Investment Corporation is its fourth-largest shareholder.
The British government and India’s Bharti Global, for their part, saved OneWeb from bankruptcy. According to one of the sources, the takeover will leave the British government with a minority stake in the merged company.
On the Paris stock exchange, Eutelsat is worth 2.4 billion euros ($2.45 billion), with a net debt of 3 billion euros as of the end of 2021.
According to the second source, Britain will retain special rights over OneWeb following the transaction, including a veto over sales to clients deemed dangerous for security reasons and a veto over a change in headquarters location.
These special rights include a veto over business relationships that could jeopardise the so-called “Five Eyes” intelligence alliance, which includes Australia, Canada, New Zealand, the United Kingdom, and the United States, as well as a say in supply chain and launch decisions.
Eutelsat has refused to comment.
Bloomberg was the first to report on the transaction.
The terms of the agreement with California-based SpaceX, a direct rival of OneWeb in the rapidly growing broadband satellite market, were not made public.
OneWeb suspended its relationship with Russia’s space agency Roscosmos earlier this month and postponed the launch of 36 satellites from Baikonur that was scheduled for March 4 due to Moscow’s last-minute demands, which included a promise that OneWeb’s technology wouldn’t be used for military purposes.
The OneWeb launch was postponed amid rising hostilities between Russia and NATO members, including Britain, over the economic sanctions Washington imposed on Moscow in retaliation for Moscow’s invasion of Ukraine on February 24.
In light of the Ukraine crisis, the British government, which owns a stake in OneWeb, also declared that it was reevaluating its involvement in future projects with Russia.
The British satellite company anticipates launching its first satellite with SpaceX later this year to expand its constellation, which already includes 428 satellites in low-Earth orbit.
With these launch plans in place, OneWeb CEO Neil Masterson said, “We’re on track to complete building out our full fleet of satellites.”
The British government and Indian telecoms giant Bharti Global saved OneWeb from bankruptcy in 2020. OneWeb intends to provide universal broadband through a network that will eventually consist of 650 satellites. Other investors in the company include SoftBank Group Corp. and Eutelsat Communications.
Around 1,500 satellites have been deployed as part of SpaceX’s Starlink, one of several projects in the quickly expanding satellite broadband market, including Amazon.com Inc. subsidiary Project Kuiper. This project offers internet access to areas that are underserved or difficult to reach for other services.
