Eutelsat confirms OneWeb GEO/LEO satellite merger talks
Following recent market rumors, Eutelsat Communications has confirmsed that it has engaged in discussions with its co-shareholders in OneWeb regarding a potential all-share combination to create a global leader in satellite connectivity with complementary GEO/LEO activities.
The combined entity would be the first multi-orbit satellite operator offering integrated GEO and LEO satellite services and would be uniquely positioned to address a booming satellite connectivity market estimated to reach roughly $16bn by 2030. OneWeb is one of the two only global LEO networks and has experienced strong momentum over recent months, with service expected to be fully deployed in 2023.
The transaction would represent a logical next step in the successful partnership between Eutelsat and OneWeb, started with Eutelsat’s equity investment in OneWeb in April 2021 and deepened with the Global Distribution Agreement announced in March 2022. Eutelsat currently holds 23% of OneWeb’s share capital, alongside a consortium of high-profile public and private investors.
Under the terms of the transaction being discussed, Eutelsat and OneWeb shareholders would each hold 50% of the combined group’s shares.
The transaction would be structured as a contribution by OneWeb’s shareholders of their stake in OneWeb to Eutelsat in exchange for newly issued Eutelsat shares. Any combination would be subject to, among other conditions, approval by the requisite majority of Eutelsat shareholders and receipt of all relevant antitrust and regulatory (including foreign investment) approvals.
Recently, Eutelsat Communications announced that its state-of-the-art KONNECT VHTS satellite is planned for launch from Europe’s Spaceport in Kourou, French Guiana on 6 September 2022 on board an Ariane 5 rocket.
EUTELSAT KONNECT VHTS, a very high throughput satellite built by Thales Alenia Space, is to deliver high-speed broadband and mobile connectivity across Europe. With a Ka-band capacity of 500 Gbps, it is the largest geostationary satellite ever ordered to date in Europe and will embark the most powerful on-board digital processor, offering capacity allocation flexibility and an optimal spectrum use.
This new-generation satellite, offering a capacity seven times that of its brother satellite EUTELSAT KONNECT launched in 2020, comes with several major firmly committed customers for satellite broadband connectivity, namely Orange via its Nordnet affiliate for French coverage, Telecom Italia Mobile over Italy and Thales Alenia Space to serve notably government connectivity services. These commitments showcase the ability of satellites to provide an attractive way for bridging the digital divide, at a time when access to connectivity plays a major role in both economic and social development.