Another step in the race to deliver high-speed Internet to the entire planet from space. On Monday July 25, the French satellite operator, Eutelsat, announced that it had entered into discussions to the acquisition of the British OneWeb, of which it is the second largest shareholder behind the Indian group Bharti Global. If the operation goes ahead, it will create a pan-European champion in low-orbit telecommunications constellations, located between 550 and 1,200 kilometers from the earth, capable of competing with the American Starlink projects of SpaceX founder Elon Musk or Kuiper. by Jeff Bezos, CEO of Amazon.
Negotiated for a few months under the code name Erika (E for Eutelsat), this project consists of merging the two companies on an equal basis by exchange of shares, in order to respect the shareholder balance of the two entities, Eutelsat having the bank public investment company Bpifrance with 20%, and OneWeb having its capital divided between Bharti Global (30%), Eutelsat (23%), the British government (17.6%), the Japanese Softbank (17.6%) and Korean Hanwa (8.8%). As for valuation, it requires adaptations to achieve parity. If OneWeb is valued at 3.4 billion euros, Eutelsat is worth nearly 2.4 billion, but the payment of an exceptional dividend should make it possible to fill the gap.
The only certainty is that the new entity, named for the time being “New Erika”, resulting from this merger will keep its headquarters in France and the management will remain the same as Eutelsat’s current one, with Dominique D’Hinnin as president, and to the general manager, Eva Berneke. Bpifrance will have a seat on the board of directors and the British government will have a right of veto over the activities of OneWeb.
A very closed club
This new group is strengthening its presence in a very closed club, due to the high entry cost of between 5 and 10 billion dollars (4.9 and 9.8 billion euros). To date, apart from OneWeb, there are only four other projects on the Western side, the Chinese being also active: Elon Musk’s 42,000 Starlink satellites, Jeff Bezos’ future Kuiper network, Canadian Telesat’s Lightspeed and since the end from 2021, Boeing.
But OneWeb is the first to deploy with Starlink, and the only one which, with its 648 satellites, will have global coverage of the planet by the end of 2022. Moreover, since December 2021, the operator has been offering services in areas beyond 50e parallel covering northern Europe, the United Kingdom, Alaska and Canada.
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