French satellite company Eutelsat poised to snap up British rival OneWeb
French satellite company Eutelsat is poised to buy British rival OneWeb in a deal which will see the UK brought together with French and Chinese governments as common shareholders.
Eutelsat, which already has a 23 per cent stake in OneWeb and is its second-biggest shareholder, could announce the takeover as early as Monday, according to sources cited by Reuters.
The tie-up is likely to come under major political scrutiny as it would bring together Indian billionaire Sunil Bharti Mittal – OneWeb’s biggest shareholders – with France, China and Britain as shareholders of the combined firm.
OneWeb was rescued from bankruptcy by the British government and India’s Bharti Globa, and the terms of the takeover will leave the British government with a minority stake in the merged business, sources told Reuters. The deal will reportedly value the UK government’s stake at $600m, according to courses cited by the Financial Times.
Eutelsat’s biggest shareholder is France’s state-owned investment bank Bpifrance, with a 20 per cent stake while its fourth-largest shareholder is China’s sovereign fund China Investment Corporation, according to Refinitiv data. The deal will see shareholders on both sides take a diluted stake, however.
A merger of the two firms will strengthen their position in the race to build a constellation of low-orbit satellites, challenging the likes of Elon Musk-owned SpaceX’s Starlink and Amazon’s Project Kuiper.
Paris-listed Eutelsat has a market value of €2.4bn while OneWeb was valued at $3.4bn in its most recent funding round, sources said.
Bloomberg first reported the deal.