Inmarsat takeover delayed by CMA probe
INMARSAT’S takeover by a US rival has been paused after watchdogs opened a formal probe into the deal.
The Competition and Markets Authority (CMA) said the British satellite firm’s £5.4bn tie-up with California-based Viasat will be investigated.
The regulator will make a decision before October 5 on whether to refer the deal for a more in-depth Phase 2 probe.
Inmarsat, which provides in-flight WiFi for airlines and internet connections for boats, agreed to the deal in November and the two businesses had wanted the takeover closed by the end of the summer.
But the timeline has been derailed after the CMA said last month it was considering an investigation into the deal on the grounds that it could result ‘in a substantial lessening of competition’ in the UK. A key area of concern is the aviation market, where the two businesses overlap.
Several companies are expected to weigh in on the inquiry into the takeover before the window for comment closes next Monday. Among those understood to want the merger blocked is French aerospace giant Airbus, one of the leading providers of satellite technology in the world.
Elon Musk’s Space X could also wade into the discussion over the merger as the billionaire looks to muscle his way into the market. SpaceX, which operates its own satellite network called Starlink, previously complained to the US Federal Communications Commission about the deal, saying
Viasat should not be allowed to control Inmarsat’s ground terminals.
Serco is thought to be another firm against the deal. The FTSE 250 outsourcer is part of Athena, a UK space partnership that includes Inmarsat as well as IT firm CGI and US defence giant Lockheed Martin.
Inmarsat’s takeover was given the green light by Viasat shareholders in June after the two companies said they had agreed to several legally binding commitments with the Government.
These included pledges to increase the number of highly skilled jobs, raise research and development spending and keep key operations in Britain.
Founded in 1979, Inmarsat began life as a UN agency helping distressed sailors send SOS signals. It employs around 1,800 staff across the world, including 860 in London. Its technology is used in everything from climate change tracking to keeping rural cattle farmers connected to the internet.
The takeover risks raising further concerns about the impact of British defence and technology firms being bought up by foreign buyers.
The probe also comes amid a battle over the future of fellow British satellite firm OneWeb, which is part-owned by the taxpayer and currently in danger of being swallowed by French rival Eutelsat.
Other controversial takeovers over the past year have included the £2.6bn buyout of defence group Ultra Electronics by US private equity group Advent International, which also bought peer Cobham in 2020 for £4bn.