Eutelsat will merge with OneWeb to create a space internet giant

French satellite operator Eutelsat announced on Tuesday that it had signed “a memorandum of understanding” to merge with Britain’s OneWeb and its Constellation, an operation intended to create a behemoth in the Internet-from-space competition against American SpaceX’s mastodon Starlink. .

After announcing on Monday that it was “in discussions (…) with a view to a possible merger” with OneWeb, in which it is already a 23% shareholder, Eutelsat confirmed on Tuesday that the shareholders of the two companies will each remain shareholders. 50% of the shares of the future combined group.

The transaction, which will take place through an exchange of shares, values ​​OneWeb at $3.4 billion, which translates into a value of 12 euros per Eutelsat share, the company said in a press release.

He added that the operation is expected to be completed “by the end of the first half of 2023”.

A specialist in geostationary orbit, with a fleet of 35 satellites 36,000 kilometers from Earth for satellite broadcasting and high-speed internet services, Eutelsat saw its stock fall 17.8% to 8,57 euros on the Paris stock exchange on Monday. Declaration of Consolidation.

British company OneWeb has already deployed 428 of the 648 satellites in its constellation in low orbit, hundreds of km above sea level, to provide high-speed Internet with low latency or to minimize data transmission delays needed to meet rapidly growing demand. .

Apart from Indian conglomerate Bharti (30%) and Eutelsat (22.9%), OneWeb’s capital includes the British government (17.6%), Japanese SoftBank (17.6%) and Korean conglomerate Hanwha (8, 8%).

Eutelsat is 20% owned by Bpifrance, the French state’s public investment bank, as well as the Strategic Participation Fund (FSP) of seven French insurance companies, with the rest of the capital floating.

– Connecting isolated regions –

The goal of this integration project is to fully install high-speed space internet in the low-orbit sector, especially serving isolated areas without fiber optics. According to Eutelsat, a market estimated at $16 billion by 2030.

Located hundreds of kilometers above sea level, these satellites, which are smaller than traditional telecommunications satellites, allow for low-latency communications.

American billionaire Elon Musk’s SpaceX has taken a step forward in this race. More than half of the 4,408 satellites in its Starlink constellation have already been deployed (it eventually wants 42,000). Amazon founder Jeff Bezos wants to deploy more than 3,200 satellites to his Kuiper constellation.

The European Union wants to deploy its own constellation of about 250 satellites in low orbit from 2024 in the name of sovereignty.

“We don’t know what the future European constellation will look like, but we look forward to starting a dialogue with the Commission,” Eutelsat CEO Eva Bernek said in a conference call on Tuesday.

As for China, it also has its own constellation project, Guowang, with 13,000 satellites.

“The low-orbit constellation is a market that could potentially become strategic for the government,” Romain Pierdon, an analyst at AlphaValue, told AFP on Monday.

“At the moment, the stakes are more sovereign, we see it in semiconductors and other industries. The goal is not to rely on anyone, so Europe will be a potentially big customer for OneWeb”, he added.

The deployment of the OneWeb constellation was suspended in February due to the suspension of Soyuz rocket flights ordered by Russia in response to Western sanctions imposed after the invasion of Ukraine.

“It could have set us back for a long time (…) but we got a lot of support from the US and the Indian government,” OneWeb Executive Chairman Sunil Bharti Mittal said on Tuesday of the Rs 3.5 crore deal. The launch is over with SpaceX and the Indian government has made available 2 GLSV rockets to complete the constellation deployment “by March 2023”.

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Eutelsat Communications

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