Low Earth Orbit satellite constellation building OneWeb and global commercial satellite provider Eutelsat have announced a $3.4 billion merger that will see, “Over €1.5 billion potential incremental value-creation after tax (net of implementation costs) stemming from revenue, capex and cost synergies.”
The deal is reported to be an all-share transaction with Eutelsat owning 100% of OneWeb, save for the ‘Special Share’ investment (bailout) by the UK Government that transpired in October of 2020. OneWeb shareholders are expected to receive 230 million newly issued Eutelsat shares representing 50% of the enlarged share capital, thus placing a $3.4 billion valuation on OneWeb.
The combined EutelWeb (?) OneSat(?) company will now see a fleet of no less than 36 GEO satellites and OneWeb’s constellation of 648 Low Earth Orbit satellites, 428 of which are currently in orbit. Ultimately the deal places the newly augmented Eutelsat in a unique position to address the blistering pace of consumer and business interest, and arguably need for, both GEO and LEO satellite technologies.
Now, if you’re thinking about this other global constellation of connectivity satellites, yes, in contrast, as of early June this year, Musk’s competing Starlink network already had 2,500 satellites in orbit and is operational in some 32 countries.
“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,” commented Eutelsat Chairman Dominique D’Hinnin. “This combination will accelerate the commercialisation of OneWeb’s fleet, while enhancing the attractiveness of Eutelsat’s growth profile.”
While the deal was concluded over an extraordinary general meeting, the merger shouldn’t come as a great surprise, as Eutelsat acquired a 23% equity stake in OneWeb in April 2021.
From OneWeb’s side, Indian billionaire and participant in the October 2020 UK Government investment Sunil Bharti Mittal commented, “Having played a pioneering role in providing connectivity in the emerging world, I am excited about the possibilities of connecting the unconnected. 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.”