France's Eutelsat is in talks to merge with Britain's OneWeb

France's Eutelsat is in talks to merge with Britain's OneWeb

According to estimates, the satellite connection market will be worth about 16 billion dollars by 2030.

French satellite company Eutelsat said it is in talks with British rival OneWeb about a possible merger that could help both companies compete with Elon Musk’s SpaceX Starlink and Amazon.com’s Project Kuiper.Eutelsat’s statement on Monday came after two sources close to the talks told Reuters over the weekend that it was ready to buy OneWeb, which was valued at $3.4 billion in a recent funding round, in which Eutelsat already owns 23 percent. “Following recent market rumours, Eutelsat Communications confirms that it has entered into discussions with co-owners in OneWeb regarding a potential all-share combination to create a global leader in connectivity,” Eutelsat said. OneWeb did not wish to comment.”Investors don’t appreciate uncertainty, and if Eutelsat is in a merger of equals with OneWeb, then Eutelsat investors will get a stake in a new entity, the other half of which is pretty much unknown to them … So I understand why Eutelsat shares have fallen on the news” – said a London merchant. At the heart of the negotiations is a transaction that would result in both Eutelsat and OneWeb shareholders acquiring a 50 percent stake in the new, combined company. According to Eutelsat, there was no assurance that the negotiations would lead to a final agreement. A deal would strengthen both companies in the race to build a constellation of low-orbit satellites. However, the merger would be politically sensitive, as in addition to the Indian billionaire Sunil Bharti Mittal, France, China and Great Britain would also be shareholders of the merged group.”From an antitrust perspective, this deal is likely to be scrutinized and will likely require political consensus from both the UK and the EU at a time when the UK is electing a new Prime Minister,” Credit Suisse wrote in a note. Eutelsat estimates that the “satellite connection” market will be worth around $16 billion by 2030. Demand for satellite launches is expected to accelerate after recent sanctions overshadowed Russia’s space industry, and giant satellite constellations could offer a new channel for broadcasting broadband internet from space. Eutelsat’s largest shareholder is the French state-owned investment bank Bpifrance, which has a 20 percent stake. According to Refinitiv data, the fourth largest shareholder is the Chinese sovereign fund China Investment Corp. OneWeb was saved from bankruptcy by the British government and India’s Bharti Global. With the merger, the British government would retain a minority stake in the merged company, said a source close to the matter. Another source said Britain would retain special rights over OneWeb after the deal, including a veto on sales to customers deemed risky for security reasons and a veto on changing the location of the headquarters. Those special rights would also mean a veto over business deals that could threaten the so-called “Five Eyes” intelligence alliance of Australia, Canada, New Zealand, Britain and the United States, as well as a say in supply chain and launch decisions .Hardware, software, tests, interesting and colorful news from the IT world by clicking here!

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