Satellite Operators Eutelsat and OneWeb to Merge.
MANews-(C)2009-2022
France-based satellite operator Eutelsat Communications (Euronext Paris: ETL) and key shareholders of UK-based OneWeb have signed a memorandum of understanding with the objective of creating a global player in Connectivity through the combination of both companies in an all-share transaction, the companies said.
Eutelsat will combine its 36-strong fleet of GEO satellites with OneWeb's constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.
The transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat, such that, at closing, Eutelsat would own 100% of OneWeb (excluding the 'Special Share' of the UK government).
OneWeb shareholders would receive 230 m newly issued Eutelsat shares representing 50% of the enlarged share capital.
The potential transaction builds on the deepening collaboration between Eutelsat and OneWeb, begun with the equity stake acquired by Eutelsat in OneWeb in April 2021, the global distribution agreement between Eutelsat and OneWeb announced in March 2022, and the new exclusive commercial partnership5, addressing mainly the European and global cruise markets, signed this week.
Eutelsat and OneWeb will address the considerable Connectivity market opportunity, which is fueled by the growing needs of customers in both the B2B and B2C segments for consistent, reliable connectivity.
These market segments are forecast to grow by three and five times respectively over the next decade, to reach a combined value of circa USD 16bn by 2030, with growth being served by both GEO HTS and LEO capacity.
Moreover, the combination of the network density, compelling economics and high throughput of GEO with the low latency and ubiquity of LEO, creates the optimal solution to address an even wider range of customer needs, thereby expanding the addressable market.
Under the deal, OneWeb shareholders would receive 230m newly issued Eutelsat shares, representing 50% of Eutelsat's enlarged share capital.
The number of new Eutelsat shares to be received by existing OneWeb shareholders would not be affected by the payment of the EUR 0.93 per share dividend with a scrip option for FY 21-22 to be proposed at the upcoming AGM of Eutelsat.
Trading under its existing name, OneWeb will continue to operate the LEO business, with OneWeb's headquarters remaining in the UK.
Eutelsat will continue to be headquartered and...
To continue reading
Request your trial