Negotiations are well underway for both companies. The French satellite operator Eutelsat announced on Tuesday that it had signed “a memorandum of understanding” to merge with the British OneWeb and its constellation, an operation intended to create a giant in the race for the Internet from space against the mastodon Starlink from American SpaceX.
After announcing on Monday that it was in discussions for a possible merger with OneWeb, of which it is already a 23% shareholder, Eutelsat confirmed on Tuesday that the shareholders of the two companies will each hold 50% of the shares of the future combined group. The transaction, which will be through an exchange of shares, values OneWeb at 3.4 billion dollars implying a value of 12 euros per Eutelsat share, the company said in a press release.
This merger project aims to install the whole in the high-speed space internet sector in low orbit, in particular to serve isolated regions without fiber optics. A market estimated at 16 billion dollars by 2030, according to Eutelsat
A devaluation of shares in view of the merger
A specialist in geostationary orbit, with its fleet of 35 satellites positioned 36,000 km from the Earth for satellite broadcasting and high-speed internet services, Eutelsat saw its stock plummet Monday by 17.8% to 8 57 euros on the Paris Stock Exchange after the announcement of the merger.
The British company OneWeb has already deployed 428 of the 648 satellites in its constellation in low orbit, a few hundred km above sea level in order to provide high-speed internet with low latency, or data transmission delay. reduced, essential to meet rapidly growing needs. Eutelsat is 20% owned by Bpifrance, the French State’s public investment bank, as well as by the Strategic Participation Fund (FSP) held by seven French insurers, the rest of the capital being floating.
More satellites in space
Who says fusion, says more satellites. In any case, this is what the approach implies. Positioned a few hundred kilometers above sea level, these satellites, which are smaller than traditional telecommunications satellites, allow low-latency communications. But satellites are not the only ones on the market.
In this race, American billionaire Elon Musk’s SpaceX has taken a step ahead. More than half of the 4,408 satellites in its Starlink constellation have already been deployed (it wants 42,000 eventually). Jeff Bezos, the founder of Amazon, intends to deploy more than 3,200 satellites for his Kuiper constellation.
The European Union also wants to deploy its own constellation in low orbit of around 250 satellites from 2024, in the name of sovereignty. “We don’t know what the future European constellation will look like, but we look forward to starting the dialogue with the Commission,” Eva Berneke, Eutelsat’s chief executive, said on a conference call on Tuesday. As for China, it also has its own constellation project, Guowang, with 13,000 satellites.
“Right now, the stakes are more and more sovereign, we see it with semiconductors and in other industries. The goal is not to depend on anyone, so Europe would be a potential big customer for OneWeb ”said Romain Pierredon, analyst at AlphaValue, to AFP on Monday.