French Satellite Operator Eutelsat To Acquire British competitor OneWeb

French satellite operator Eutelsat is set to acquire British competitor OneWeb, sources stated. OneWeb was valued at $3.4 billion in the most recent round of funding, sources added. Eutelsat currently owns an ownership stake of 23% in OneWeb and is the second largest shareholder.

The merger of these two companies could increase their standing, when it comes to construct an array of satellites with low orbit and would challenge the likes of Elon Musk's SpaceX's Starlink and Amazon.com Inc's Project Kuiper.The demand of satellite launch launches likely to increase following recent sanctions that have slowed space launches. Russian sector of space launches large satellite constellations may provide an alternative channel for beaming broadband internet to space. The merger is politically sensitive since it brings Bharti Enterprises' Chairman Sunil Bharti Mittal, France, China and Britain together as shareholders in the newly formed entity. Bharti Global is OneWeb's biggest shareholder.

Eutelsat's largest investor is the state-owned bank for investment Bpifrance, which is owned by France's state-owned investment bank which holds 20%. The fourth largest investor is the sovereign funds of China, China Investment Corporation as per the the Refinitiv data. OneWeb is saved from bankruptcy through the British government as well as Bharti Global. The merger is expected to leave only the British Government with just a small stake in the newly merged company One of the sources claimed.

Eutelsat is an estimated valuation in the range of 2.4 billion euros ($2.45 billion) on the Paris stock exchange. The company has an outstanding debt of 3.0 milliards euros at the time of its closing of 2021. Britain will be granted exclusive rights to OneWeb following the agreement, a second source added, which includes the right to veto sales to customers who are considered to be insecurity-related risky and a veto on changes to the headquarters' location.

These rights include an veto on business relations which could undermine that so-called "Five Eyes" intelligence alliance that includes Australia, Canada, New Zealand and The United Kingdom and the United States as well as a vote on the launch and supply chain decisions, sources stated. OneWeb was valued at $3.4 billion in the most recent round of funding, sources added. Eutelsat currently owns an ownership stake of 23% in OneWeb and is the second largest shareholder.