Satellite Firms OneWeb and Eutelsat to Combine Operations
OneWeb, the London-based satellite firm that was once on the verge of bankruptcy and then partially saved by the British government, is to merge with Paris-headquartered Eutelsat.
The French company (Eutelsat) already owned a 23% stake in the UK firm.
As stated by the operators, the joint mission will provide both companions a better opportunity to realize the business opportunities.
OneWeb is developing a low-Earth orbit constellation of satellites to supply internet broadband connections around the world.
Eutelsat satellites operates 30-times higher in what is known as a Geostationary Orbit, at 36,000 km in elevation. It is among the largest supplier in the world of direct-to-home television.
Eutelsat chief executive Eva Berneke stated that: “This transaction will deliver a unique capability across the satellite industry through a fully integrated GEO/LEO offering.”
She also added: “It will provide customers with a one-stop-shop of satellite connectivity. Our new business will be uniquely positioned in the fast-growing connectivity market. This is estimated at about EUR16bn (₤ 13.6 bn) by 2030.”
The association has been referred to as a “merger of equals.” However, regarding pedigree, Eutelsat has a much longer heritage, having initially launched as a pan-European intergovernmental organization 45 years ago. OneWeb, on the other hand, has invested in recent years in start-up territory.
The exchange is to be arranged as an exchange of OneWeb shares by its shareholders (apart from Eutelsat) with new shares provided by Eutelsat. Such that, at closing, Eutelsat would possess 100% of OneWeb (bar a “golden share” held by the UK government).
OneWeb shareholders would acquire 230 million freshly released Eutelsat shares representing 50% of the increased share capital.
The firms will maintain their names for their side of the joint business and their corresponding headquarters. The objective is to have listings on both Paris and London stock exchanges.
The deal calls for regulatory authorization; however, if everything works out, the transaction should finish at the beginning of 2023.
Better overall growth
Analysts that have looked into the situation say the merging makes sense for both companies.
For Eutelsat, which has been working on branching out far from its conventional video markets, which are mostly flat, and getting involved in the broader connectivity markets that have a better growth capacity – for instance, connecting ships, planes, and mobile or remote customers.
For OneWeb, it will take advantage of having the cash-raising capacity of its older sibling. The London-based firm will need money to update and grow its LEO constellation constantly.
For its first generation, it is going for 650 satellites for international coverage; however, it aims to reach 7,000.
OneWeb chief executive Neil Masterson clarified, “Two-thirds of the (Generation One) fleet is already deployed. And right now, most of the satellites required to complete the constellation are really made.”
He added: “Gen One is fully-funded; we’ve already raised EUR6.3 bn. And Gen Two, which is under assessment right now, will provide much more capacity at a much-reduced cost.”
OneWeb has been frustrated in its initiatives to launch the Gen One satellites following its loss of accessibility to Russian Soyuz rockets. When the West enforced sanctions on Russia for its invasion of Ukraine, Moscow responded by removing all Soyuz rockets from the market, leaving OneWeb scrabbling for alternative flights.
It has currently contracted several launch providers, the most considerable being California’s SpaceX company, which is also building its broadband constellation, Starlink.
The UK government injected $500m (EUR490m; ₤ 420m) into OneWeb to pull it out of bankruptcy in 2020.
The government’s golden share provides it certain vetoes on what takes place in the company; however, like all existing shareholders in OneWeb, it okayed the merging with Eutelsat.
Originally published by: BBC
