French firm confirms talks to acquire OneWeb
FRENCH satellite company Eutelsat said it was in talks over a possible all-share merger with British rival OneWeb, which could help both companies challenge the likes of Elon Muskowned SpaceX’s Starlink and Amazon.com’s Project Kuiper.
Eutelsat’s statement on Monday (25) came after two sources close to the negotiations said last weekend it was poised to buy OneWeb, which was valued at $3.4 billion (£2.82bn) in its most recent funding round and in which Eutelsat already has a 23 per cent stake.
“Following recent market rumours, Eutelsat Communications confirms that it has engaged in discussions with its coshareholders in OneWeb regarding a potential all-share combination to create a global leader in connectivity,” Eutelsat said. OneWeb declined to comment.
The talks are centred on a transaction that would result in Eutelsat and OneWeb shareholders each holding 50 per cent of the new, combined entity. There were no assurances that the talks would result in any final agreement, Eutelsat said.
A deal would strengthen both companies in the race to build a constellation of low-orbit satellites. But a tie-up would be politically sensitive, as it would bring together Indian billionaire Sunil Bharti Mittal, along with France, China and Britain as shareholders of the combined group.
Eutelsat estimated the “satellite connectivity” market to be worth around $16bn (£13.2bn) by 2030. Eutelsat’s biggest shareholder is France’s state-owned investment bank Bpifrance, with a 20 per cent stake. Its fourthlargest shareholder is China’s sovereign fund China Investment Corp, according to Refinitiv data.
OneWeb was rescued from bankruptcy by the British government and India’s Bharti Global. A merger would leave the British government with a minority stake in the merged business, one source close to the matter said. Britain would retain special rights over OneWeb after the deal, another source said, including a veto over sales to clients deemed risky for security reasons, and a veto over a change in its headquarters.