French satellite operator Eutelsat has announced it has signed a “memorandum of understanding” to merge with Britain’s OneWeb and its Constellation, an operation intended to create a giant in the Internet-from-space competition against American SpaceX’s juggernaut 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 that the shareholders of the two companies will each have 50% of the shares of the combined group in the future transaction, which is an exchange of shares. Through, OneWeb will be valued at $3.4 billion, which translates into a value of 12 euros per Eutelsat share, the company said in a press release. The operation is expected to be completed “at the end of the first half of 2023,” he added.
Shares of Eutelsat, a specialist in geostationary orbit whose fleet of 35 satellites provide satellite broadcasting and broadband Internet services 36,000 kilometers from Earth, lost 1.98% to 8.41 euros, in a market that fell slightly, about 0.3% lower, about 0.31%. Although it was down about 18% on Monday, group general manager Eva Bernek cited strong “uncertainty” created by “our lack of communication” during a conference call on Tuesday. “We are building a growth-oriented group” and the acquisition “is a big change for some shareholders,” he said.
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.
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. 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 plans 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 are interested in starting a dialogue with the Commission,” said Eva Bernek 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”.