Is there a merger of satellite companies on the cards? France’s Eutelsat has announced it is in talks regarding a merger with Britain’s OneWeb, hoping to combine their networks and take advantage of a growing satellite connectivity market.
Combined, the two companies would be the first multi-orbit satellite operator, offering both geostationary (GEO) and low Earth orbit (LEO) solutions to customers, Eutelsat said in a statement on July 25, 2022.
“Following recent market rumors, Eutelsat Communications (Euronext Paris: ETL) confirms that it has engaged in discussions with its co-shareholders in OneWeb regarding a potential all-share combination to create a global leader in Connectivity with complementary GEO/LEO activities,” the French company announced.
Eutelsat said a merger would mean the two companies were “uniquely positioned” to address what it described as a “booming” satellite connectivity market, which is estimated to be worth approximately $16 billion in 2030. It noted that OneWeb has experienced strong momentum recently, with its service set to be fully deployed in 2023.
Eutelsat, which was created in 1977 and launched its first satellite in 1983, operates a fleet of 36 GEO satellites serving broadcasters, video service providers, telecom operators, internet service providers and government agencies operating across Europe, the Middle East, Africa, Asia and the Americas.
OneWeb is headquartered in London and was rescued by the UK government and Indian telecoms firm Bharti in 2020. It offers a global communications network for governments, business and communities across the world, powered by a constellation of 648 LEO satellites.
Eutelsat already owns 23% of OneWeb and said a merger would represent a logical next step in their partnership.
Under the terms of the potential deal being discussed, Eutelsat and OneWeb shareholders would each own 50% of the combined group. OneWeb shareholders would provide their stake in OneWeb in exchange for new Eutelsat shares.
Any deal would require shareholder and regulatory approval, Eutelsat said, cautioning that the merger was not yet a done deal.
“Eutelsat will inform the market as soon as there are any new developments,” it added.