French satellite form Eutelsat is set to take over satellite internet company OneWeb, till now majority owned by Airtel’s Sunil Mittal (other partner being the British govt). The combined entity will be a formidable force that can take on mighty rival Elon Musk’s Starlink and Amazon’s Kuiper project.
By today’s deal, Eutelsat has increased its shareholding in OneWeb to 50 per cent, with the other shareholders of OneWeb holding the remaining.
The combined entity is strongly positioned to address the fast growing global connectivity market, according to a statement issued by OneWeb in Delhi on Tuesday evening.
Eutelsat will combine its 36-strong fleet of GEO satellites with OneWeb’s constellation of 648 Low Earth Orbit (LEO) satellites, of which 428 are currently in orbit.
Eutelsat’s strong cash flow generation could help to provide visibility and funding to support continued expansion into the low earth orbit (LEO) satellite services market through OneWeb’s next generation of satellites, with an estimated 1.5 billion euros of saving expected due to revenue, capex and cost synergies.
The new entity’s Board will include Eutelsat Chairman and its CEO, OneWeb’s Chairman, and a significant number of independent directors proposed by Eutelsat and OneWeb’s shareholders at its Extraordinary General Meeting.
The transaction values OneWeb at $3.4bn implying a value of €12 per Eutelsat share (including the dividend, before synergies).
Once the deal is closed, Eutelsat would own 100 per cent of OneWeb (excluding the ‘Special Share’ of the UK Government). OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50 per cent of the enlarged share capital.
Sunil Bharti Mittal, OneWeb’s Executive Chairman said, “Having played a pioneering role in providing connectivity in the emerging world, I am excited about the possibilities of connecting the unconnected. The combination of Eutelsat and OneWeb represents a significant development in that direction as well as a unique GEO/LEO combination.”
Eva Berneke, Eutelsat CEO said “Our…full combination will ensure the potential of the GEO/LEO integration is fully realised, supported by compelling financial, strategic, and industrial logic. This ground-breaking combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb’s commercial deployment, and Eutelsat’s pivot to Connectivity.”
Eutelsat and OneWeb together will be a powerful player in the slates-to-be-big-soon ‘internet from space’ opportunity, with a market value expected to hit 16 billion dollars by the end of the decade.
