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Eutelsat, OneWeb complete merger

September 28, 2023

By Chris Forrester

Eutelsat Communications has announced the completion of its all-share combination with OneWeb, the global low Earth orbit (LEO) satellite communications network, following the approval at the Ordinary and Extraordinary General Meeting of Eutelsat shareholders in Paris. The combination forms Eutelsat Group.

The company remains headquartered in Paris. OneWeb will be a subsidiary operating commercially as Eutelsat OneWeb with its centre of operations remaining in London. The Company remains listed on the Euronext Paris Stock Exchange and has applied for standard listing on the London Stock Exchange.

Eutelsat shareholders have been badly hurt by the merger. When the merger plan was announced on October 12th 2022 share prices were at €8.18, but had been as high as €10-€11 over the previous year. Today (September 28th) they declined again, after trading on September 27th at around €5.25. Not helping is Eutelsat’s decision to cancel dividend payment for the next three trading years to help fund OneWeb’s ‘second-generation’ satellites.

Eutelsat Group says the newly formed company is strategically positioned to be a global leader in space communications. Eutelsat’s GEO fleet will combine network density and high throughput with the low latency and ubiquity of OneWeb’s LEO constellation to offer customers global, fully integrated connectivity services.

With OneWeb’s network already active and set to be globally operational by end of 2023, the combined GEO-LEO service will open up new markets and applications for customers, including Fixed Connectivity (Backhaul, Corporate networks), Government Services and Mobile Connectivity (Maritime and Inflight). Eutelsat Group says broadcast and video services will remain integral to its business and continue to deliver innovative services for customers, including new IP native video services, at the convergence of broadband and broadcast.

The combined entity is expected to grow at a double-digit revenue CAGR over the medium to long-term, reaching c. €2 billion in 2027. Adjusted EBITDA for the combined entity is expected to grow at a double digit CAGR over the same period, outpacing revenue growth.

Dominique D’Hinnin, Chairman of the Board of Directors, said: “This is an historic moment for the satellite industry. We are bringing together two businesses that are at the forefront of delivering integrated, seamless and reliable connectivity to customers worldwide. We will be moving fast to accelerate the growth of the combined business. With the support of strategic shareholders of both entities, we are confident of maximising financial performance and operational excellence, while capitalising on the high-return investment of next generation satellites. I would like to pay tribute to all colleagues who have ensured we can successfully deliver this combination. We are ready to provide connectivity and services that will support economic and social development globally as a trusted partner for multi-orbit connectivity.”

Sunil Bharti Mittal, Vice-Président (Co-Chair) of the Board of Directors, said: “This exciting combination will be transformative for communities and businesses worldwide, utilising the unique blend of GEO and LEO technologies. This is a major milestone for us, our partners, and the customers we serve. The business combines compelling strategy, technology, and talent to deliver across several markets and verticals and together we are well-positioned to deliver value for all our shareholders. Closing the digital divide is a critical mission for Eutelsat Group and the combination of these two businesses, which have each pursued this goal separately, accelerates our progress. I want to thank everyone who has made today possible. Because of the work of our colleagues, we have created a company which will bring connectivity to more people around the world and help close the digital divide.”

Eva Berneke, Chief Executive Officer, added: “Eutelsat Group is the only GEO-LEO operator in satellite communications that can offer a ubiquitous connectivity service. Global connectivity is an important and exciting challenge to deliver upon. We can address a wider range of customer requirements and provide hybrid connectivity services where they are required worldwide, all with industry leading resilience. As we continue our track record of innovation to develop future generations of satellite technology, we can unlock significant value both for customers and shareholders. The Eutelsat-OneWeb combination has given us the scale, financial strength, and business proposition to capitalise on the significant opportunity.”

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