Satellite broadband company OneWeb and French satellite operator Eutelsat, which is already an investor in the company, have proposed a $3 billion-plus merger that will help OneWeb better compete with Elon Musk’s Starlink in the satellite broadband space.
The companies are branding the deal as “creating a genuine global leader in satellite connectivity, future-proofing the company and the U.K.’s asset in a highly competitive market where there is considerable consolidation.”
The deal is subject to regulatory approval and includes both U.S. and European licenses.
They suggested the urge to merge was critical to their future success. “The space industry is moving towards consolidation, and we have acted to ensure we have the right scale, funding and business proposition to enhance our long-term future,” the companies said. “We are guaranteeing the development of our Gen2 satellite network and our ability to go head-to-head with the biggest players across new markets, working with customers and governments in new geographies.”
The all-stock transaction would see shareholders of both companies holding 50% of the newly combined operators under the Eutelsat name.
Eutelsat said it will provide funding to expand OneWeb's low Earth orbit (LEO) constellation of broadband satellites.
Eutelsat initially invested in OneWeb in April 2021.
The Federal Communications Commission approved OneWeb’s satellite broadband service in 2017, one of several such companies, including SpaceX’s Starlink service, that the FCC hopes will provide competition to terrestrial broadband operators.
OneWeb filed for bankruptcy in March 2020 but reorganized later in the year with help from the British government, which took a 33% stake. ■
