French Company Eutelsat Buys OneWeb, Competition To Launch Satellite Into Orbit Is Getting More Exciting

JAKARTA - French satellite company Eutelsat is ready to buy their British rival OneWeb. The purchase will be made in a deal to be announced on Monday, July 25. This was quoted from two sources close to the negotiations on Sunday, July 24.

"OneWeb is currently valued at $3.4 billion in its latest funding round," said one of the sources, quoted by Reuters. Eutelsat already owns a 23% stake in OneWeb and is the second largest shareholder.

The merger of the two companies will strengthen their position in the race to build a constellation of low-orbit satellites. They could challenge Elon Musk's SpaceX's Starlink and Amazon.com Inc's Project Kuiper.

Demand for satellite launches is expected to increase after recent sanctions have sidelined the space launch industry from Russia. Moreover, giant satellite constellations can now offer new channels for transmitting broadband internet from space.

The bond is politically sensitive, as it will unite Indian billionaire Sunil Bharti Mittal, as well as France, China and Britain as shareholders of the combined entity. Bharti Global is the largest shareholder in OneWeb today.

Eutelsat's largest shareholder is the French state-owned investment bank, Bpifrance, with a 20% stake. according to Refinitiv data, the fourth largest shareholder is the Chinese government fund, China Investment Corporation.

OneWeb, for its part, was rescued from bankruptcy by the UK government and India's Bharti Global. According to the sources above, the takeover would give the UK government a minority stake in the combined business.

Eutelsat alone has a market value of 2.4 billion euros (IDR 36.6 trillion) on the Paris stock exchange, with a net debt of 3 billion euros (IDR 45.8 trillion) at the end of 2021.

"The UK will retain the exclusive rights to OneWeb after the deal," said a second source. This includes a veto power over sales to clients deemed dangerous for security reasons and a veto over a change in headquarters location.

These special rights also require a veto over business relationships that could jeopardize the so-called "Five Eyes" intelligence alliance consisting of Australia, Canada, New Zealand, the United Kingdom and the United States, as well as voting rights on supply chains and launch decisions.

Eutelsat itself still declined to comment on the report, which first emerged from Bloomberg.