Satellite operator Eutelsat Communications and London-headquartered global communications platform OneWeb have inked a memorandum of understanding (MoU) with the objective of creating a leading global connectivity player through a combination of both the companies in an all-share transaction.
The transaction will be an exchange of OneWeb shares by its shareholders with new shares issued by Eutelsat. Once the transaction is successfully complete, Eutelsat will own 100 per cent of OneWeb, excluding the UK Government’s special share. OneWeb shareholders would get 230 million newly issued shares of Eutelsat representing 50 per cent of the enlarged share capital.
As part of this combination, Eutelsat will combine its fleet of 36 GEO satellites with OneWeb’s constellation of 648 low earth orbit (LEO) satellites, of which 428 are in orbit.
Commenting on the partnership, OneWeb Executive Chairman Sunil Bharti Mittal said, “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.”
Eutelsat Chief Executive Officer Eva Berneke noted, “The combined entity will be geared towards profitable growth, with strong medium-term cash flow generation and a rapid deleveraging driven by strong forecast EBITDA growth. The benefits for our customers and strategic partners, who are at the center of our strategy, are both significant and unique. This is also a very exciting opportunity for our employees who will be key to the success of this transformation.” Business Today