OneWeb is joining forces with one-time rival Eutelsat as the race to build a constellation of low-orbit satellites heats up.
Two European satellite companies, OneWeb and Eutelsat, are merging in a bid to consolidate their market position and become more competitive globally.
The companies have signed a memorandum of understanding to create an entity that will generate an estimated €1.2bn in revenue this fiscal year.
The UK government is a minority shareholder in UK-headquartered OneWeb, which is developing a low-Earth orbit satellite constellation. It will now merge with Eutelsat, a French satellite operator serving Europe, Africa, Asia and the Americas.
The deal with its one-time rival values OneWeb at $3.4bn. Shareholders of both companies will own half of the combined firm, respectively. Subject to approval by regulators and shareholders, the merger is expected to go through in the first half of 2023.
Eutelsat chair Dominique D’Hinnin said the merger will enable the two companies to “seize the significant growth opportunity in connectivity”.
Eutelsat will add its 36-strong fleet of geostationary orbit satellites to OneWeb’s constellation, which has 428 satellites already in orbit.
OneWeb will continue to operate the low-Earth orbit satellite business, trading under its own name. The UK government will also retain its special shareholder status and the UK will be OneWeb’s preferred launch spot for satellites in the future.
Eutelsat will apply for admission to listing on the London Stock Exchange, and will continue to be listed on Euronext Paris.
D’Hinnin described the deal as “truly a game changer” for the satellite industry.
The two companies will be looking to compete against Elon Musk’s SpaceX, which is creating a network of low-orbit satellites that has the potential to bring internet to users anywhere in the world.
Neil Masterson, OneWeb’s CEO, said that OneWeb had become the second largest low-Earth orbit satellite operator in the world in a relatively short time.
He said the merger with Eutelsat would “create a fast growing, well-funded company which will continue to create significant value for our shareholders”.
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