(BFM Bourse) – The French satellite operator confirmed on Monday that it has started discussions looking at a possible merger with the British OneWeb. This merger will allow the emergence of a new pan-European giant in front of Starlink, the project of the American billionaire Elon Musk. The marriage project was far from unanimous in the stock market, the title accelerated its losses and fell by more than 17% on Monday.
Following recent market rumors, Eutelsat Communications has confirmed that it has entered into discussions with its co-shareholders in OneWeb, with a view to a possible merger of the two companies through the exchange of part. This merger will represent a logical continuation of the partnership between Eutelsat and OneWeb, which began with Eutelsat’s acquisition of a stake in OneWeb in April 2021, followed by a worldwide distribution agreement which was announced in March 2022. Eutelsat currently holds 23% of OneWeb’s capital together with a consortium of leading public and private investors.
Eutelsat is a specialist in geostationary orbit, with a fleet of 35 satellites positioned 36,000 kilometers from Earth for satellite broadcasting and high-speed internet services,
The British company OneWeb has already deployed 428 of its 648 satellites in its constellation in low orbit, several hundred kilometers above sea level to provide high-speed internet with low latency or data transmission delay, necessary to meet the growing demand.
The emergence of a pan-European leader to challenge Starlink
This integration project aims to set up the whole of the high-speed space internet sector, especially to serve remote regions without fiber optics or to meet the future needs of the connected car, for example.
“The combined entity will be the first multi-orbit satellite operator to offer integrated GEO/LEO (geostationary and low orbit) solutions, and will be uniquely positioned to address the growing connectivity market, estimated at $16 billion. in 2030, “said Eutelsat in a press release of this integration project revealed on Saturday by the Bloomberg agency.
This project will make it possible to produce a new giant in front of Starlink, the constellation of the American billionaire Elon Musk, which has already deployed more than half of the 4,408 satellites in its constellation. Jeff Bezos, the founder of Amazon, plans to deploy more than 3,200 satellites for his Kuiper constellation.
The European Union also wants to deploy its own low-orbit constellation of around 250 satellites from 2024 in the name of sovereignty. According to European Commissioner Thierry Breton, this constellation will make it possible to end the “white zones” in Europe, to offer encrypted communications to States using quantum technologies, and to have redundancy in terms of terrestrial ones. network, targets of cyberattacks. As for China, it also has its own constellation project, Guowang, with 13,000 satellites.
A transaction by exchange of shares
“Under the terms of the contemplated transaction, the shareholders of Eutelsat and OneWeb will each have 50% of the shares of the combined group,” Eutelsat said. The transaction will be made through the exchange of shares, the shareholders of each of the two groups holding half of the future entity.
Bankrupt during the pandemic, OneWeb was taken over by the Indian conglomerate Bharti and the UK government. Besides Bharti (30%) and Eutelsat (22.9%), OneWeb’s capital includes the British government (17.6%), Japanese Softbank (17.6%) and Korean conglomerate Hanwa (8.8%).
Eutelsat is 20% owned by Bpifrance, the public investment bank of the French State, as well as the Strategic Participation Fund (FSP) held by seven French insurers (7.6%), the remaining capital is floating .
“There is no guarantee that these discussions will lead to an agreement. Eutelsat will inform the market of any new development in due time”, added the French operator. This uncertainty about the outcome of the negotiations led to a drop of 17% to 8.71 euros in the share of Eutelsat, on the Paris Stock Exchange, which fell slightly by 0.09%.
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