Eutelsat Communications and key OneWeb shareholders have signed a Memorandum of Understanding to create a leading global player in connectivity through the combination of both companies in an all-share transaction.
The MoU will see Eutelsat combining its 36-strong fleet of GEO satellites with OneWeb’s constellation of 648 Low Earth Orbit satellites. OneWeb has 428 satellites currently in orbit.
The companies say the transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat, such that, at closing, Eutelsat would own 100% of OneWeb (excluding the ‘Special Share’ of the UK Government). Also, OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50% of the enlarged share capital.
Commenting on the combination, Dominique D’Hinnin, Eutelsat’s Chairman said: “I am delighted to announce this new and significant step in the collaboration between Eutelsat and OneWeb. Bringing together our two businesses will deliver a global first, combining LEO constellations and GEO assets to seize the significant growth opportunity in connectivity, and deliver to our customers solutions to their needs across an even wider range of applications.
“This combination will accelerate the commercialisation of OneWeb’s fleet, while enhancing the attractiveness of Eutelsat’s growth profile. In addition, the combination carries significant value creation potential, anchored on a balanced mix of revenue, cost and capex synergies. The strong support of strategic shareholders of both parties is a testament to the huge opportunity that this combination offers and the value that will be created for all its stakeholders. This is truly a game changer for our industry.”
Sunil Bharti Mittal, OneWeb’s Executive Chairman commented: “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.
“The positive early results of our service together with our strong pipeline represent a very exciting opportunity in the fast-growing satellite connectivity segment, especially for customers requiring a high speed, low latency experience. Our customers are actively seeking a combined GEO/LEO offering leading us towards this important step. Bharti, as the lead shareholder of OneWeb, along with other key shareholders, is looking forward to playing a meaningful role in providing expanded connectivity through the combination of OneWeb and Eutelsat.”
