The newly formed entity is ‘strategically positioned to be a global leader in space communications’, according to the two companies
Satellite operators Eutelsat communications and OneWeb have this week announced the completion of their $3.4 billion merger, following a Eutelsat shareholder meeting.
The two companies have combined to form Eutelsat Group, which will be headquartered in Paris. OneWeb will become a subsidiary of the Group, operating as Eutelsat OneWeb, with its operations remaining in London.
The merger will see OneWeb’s constellation of low-Earth orbit (LEO) satellites added to Eutelsat’s geostationary orbit (GEO) satellites, creating the “only GEO–LEO operator in satellite communications that can offer a ubiquitous connectivity service,” according to Eutelsat CEO Eva Berneke
“This is an historic moment for the satellite industry. We are bringing together two businesses that are at the forefront of delivering integrated, seamless and reliable connectivity to customers worldwide,” said Dominique D’Hinnin, Chairman of the Board of Directors in a statement.
“This exciting combination will be transformative for communities and businesses worldwide, utilising the unique blend of GEO and LEO technologies,” said Bharti Airtel’s Sunil Bharti Mittal, Vice-President of the Board of Directors.
“Closing the digital divide is a critical mission for Eutelsat Group and the combination of these two businesses, which have each pursued this goal separately, accelerates our progress,”said Sunil Bharti Mittal Co-Chair of the Board of Directors.
The UK government owns a minority stake in OneWeb, following a rescue deal in 2020 that prevented the firm’s collapse. According to a statement released last year after the Memorandum of Understanding between the two firms, the UK government will retain this special share in OneWeb and a number of exclusive rights.
Upon the news, Eutelsat shares rose 3.5%.
Competition in the space communications industry is increasing steadily, with analysts at Morgan Stanley estimating that the industry could be worth more than $1 trillion by 2040, up from a $550 billion today, as the industry becomes increasingly lucrative.
Indeed, this is not the only major satellite merger we have seen this year, with global communications firm Viasat buying the UK’s Inmarsat for $6.2 billion back in May.
“Satellite communications is a hugely significant and strategic global market for the U.K. space sector, now poised for an exciting next phase,” said George Freeman MP, the UK’s Minister of State at the Department of Science, Innovation & Technology.
Mergers such as these could be set to provide significant competition for Elon Musk’s LEO constellation Starlink, which has quickly established itself as one of the world leading satellite internet providers.
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