Eutelsat completes multi-orbit OneWeb merger after shareholder vote

Eutelsat completes multi-orbit OneWeb merger after shareholder vote

Covering the business and politics of space

TAMPA, Fla. — Eutelsat has combined its geostationary satellite business with OneWeb’s low Earth orbit (LEO) constellation after shareholders voted Sept. 28 in favor of the all-share deal.

Getting approval from at least two-thirds of Eutelsat’s shareholders was the final step for a merger valuing OneWeb at $3.4 billion when it was announced last year, and had been expected after investors collectively holding 49.4% of the French operator already voiced their support.

More than 87% of Eutelsat shareholders voting at its general meeting Sept. 28 supported the OneWeb merger.

U.K.-based OneWeb’s shareholders had previously approved the deal, which received all the regulatory permissions needed to move ahead Aug. 10.

OneWeb will operate as a subsidiary of the French operator called Eutelsat OneWeb and its center of operations will remain in London.

While Eutelsat remains headquartered in Paris and listed on the Euronext Paris Stock Exchange, the company has also applied to trade shares on the London Stock Exchange.

Eva Berneke, Eutelsat’s CEO, said the combination has created the only operator of a geostationary and LEO satellite network, which it sees as critical for meeting future demand for connectivity worldwide.

“We can address a wider range of customer requirements and provide hybrid connectivity services where they are required worldwide,” Berneke said in a statement, adding: ”The Eutelsat-OneWeb combination has given us the scale, financial strength, and business proposition to capitalise on the significant opportunity.”

OneWeb completed the deployment of its constellation earlier this year and currently has 634 satellites LEO as it prepares to offer services globally before the end of 2023.

The low-latency LEO network is set to play an important part in Eutelsat’s pivot to connectivity services, which the French operator expects will help it return to growth next year after a waning video business helped annual sales decline for the seventh year in a row.

The combined group forecasts a double-digit compound annual growth rate (CAGR) for revenues over the medium to long term, reaching around 2 billion euros ($2.1 billion) in 2027.

The group expects its adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, will also see a double-digit CAGR over the same period, outpacing revenue growth.

Eutelsat’s revenues fell 5.5% year-on-year to 1.31 billion euros for its fiscal year ending June 30, when adjusted for currency changes on a like-for-like basis. Adjusted EBITDA fell 4.2% to 825.5 million euros.

Completing the combination also enables Eutelsat and OneWeb to move forward with joint plans for a $4 billion second-generation LEO network slated to enter service by early 2028.

However, it could complicate Eutelsat’s bid for a role in IRIS², Europe’s planned 6 billion euro ($6.5 billion) multi-orbit connectivity constellation also known as Infrastructure for Resilience, Interconnectivity and Security by Satellite.

The British government has retained voting rights in OneWeb following the Eutelsat merger that it acquired after helping to rescue the venture from bankruptcy in 2020.

Although Eutelsat has said this U.K. stake will be sufficiently ring-fenced, a top European Union commissioner has warned of a potential conflict of interest because the United Kingdom is no longer part of the European Union following Brexit.

U.K. Science Minister George Freeman said the British government’s stake in the combined company, and a seat on its board of directors, will help ensure the United Kingdom remains the preferred location for OneWeb’s commercial activity.

“Through our equity stake and Board representation in the combined Eutelsat Group we look forward to delivering on our commitment to realise OneWeb’s full commercial potential through its Gen2 satellite program as part of the new Eutelsat Group,” Freeman told SpaceNews via email.

“This stands to deliver huge opportunities for the UK satellite manufacturing, space services and telecoms sectors as it pioneers new technologies, products and services for a safe, secure and sustainable commercial satcom sector in the coming years.”

Eutelsat’s OneWeb merger comes four months after Viasat, a geostationary operator based in California, snapped up Inmarsat of the United Kingdom for $6.2 billion in a satellite connectivity market facing growing competition from SpaceX’s Starlink LEO network.

Jason Rainbow writes about satellite telecom, space finance and commercial markets for SpaceNews. He has spent more than a decade covering the global space industry as a business journalist. Previously, he was Group Editor-in-Chief for Finance Information...

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