OneWeb, the satellite broadband provider bailed out by the UK Government, is to merge with France’s Eutelsat in a deal the two firms say will create “a leading global player in connectivity”.
The combined firm will operate Eutelsat’s fleet of 36 GEO satellites and OneWeb’s constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.
Under the terms of the deal, OneWeb shareholders (other than Eutelsat which already owns 23% of the firm) will swap their shares for new Eutelsat shares. On completion of the deal, existing OneWeb and Eutelsat shareholders would each own 50% of the combined company.
The UK Government would retain its ‘golden share’ which gives it a right of veto over any transfer of OneWeb’s technology. In addition, OneWeb will retain its brand and UK headquarters.
Dominique D’Hinnin, Eutelsat’s Chairman said: “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.”
Sunil Bharti Mittal, OneWeb’s Executive Chairman said: “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 transaction is expected to close by the end of first half of 2023 subject to approval by Eutelsat’s shareholders and clearance from regulators.