Satellite operators Eutelsat and OneWeb are to merge and combine their respective geostationary (GEO) and low-Earth-orbit constellations.
Eutelsat would own 100% of OneWeb through the arrangement, announced July 26, building on its existing 23% stake in OneWeb—acquired in April 2021—and a global distribution agreement signed in March.
The deal values OneWeb at $3.4 billion. OneWeb shareholders, which include the British government, would receive 230 million newly issued Eutelsat shares, representing 50% of the enlarged company’s share capital.
Eutelsat sees OneWeb’s LEO constellation as being “highly complementary” to its network of geostationary satellites. The combined entity would pursue a networked GEO/LEO service, including a common platform and hybrid terminals.
Eutelsat operates a 36-strong fleet of GEO satellites while OneWeb has 428 of its planned 648 satellites in LEO.
An early target for the companies is the European and global cruise markets, which will be addressed through a commercial partnership between the two companies, also signed July 26.
Eutelsat Chairman Dominique D’Hinnin said combining the companies’ networks would allow them to meet customer needs across a broader range of applications, and would “accelerate the commercialization of OneWeb’s fleet.”
“This combination accelerates our mission to deliver connectivity that will change lives at scale and create a fast-growing, well-funded company which will continue to create significant value for our shareholders,” OneWeb CEO Neil Masterson said.
The UK’s Department for Business, Energy & Industrial Strategy—which holds the UK government’s share in OneWeb after helping save the company from bankruptcy two years ago—said the deal would give the UK a “significant stake in what will become a single, powerful, global space company.” Merging with Eutelsat would put OneWeb on a “sound financial footing,” that would allow it to compete in the global satellite industry, the UK government said. On completion of the proposed transaction, the UK would retain its special share and its exclusive rights over OneWeb, maintaining national security controls over the network and giving it first-preference rights over domestic industrial opportunities such as satellite manufacturing.
According to Eutelsat, OneWeb will continue to operate under its existing name, and will retain its headquarters in London, while Eutelsat will continue to be based in Paris.
Dominique D’Hinnin would be proposed as chairman of the combined entity and Sunil Bharti Mittal, OneWeb’s executive chairman, would become the enlarged group’s co-chairman (vice-president). Eutelsat CEO Eva Berneke would be CEO of the combined entity.
The companies expect the transaction to close by the end of June 2023.
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