OneWeb, Eutelsat agree $3.4 billion deal to create company to rival Musk’s SpaceX

Eutelsat Communications SA and OneWeb Ltd. are set to combine in an all-share deal valuing the UK satellite operator at $3.4 billion, a step toward creating a European champion to rival the likes of Elon Musk’s SpaceX.

OneWeb shareholders will hold 50 percent of Eutelsat, which will continue to be listed in Paris and will ask to be listed on the London Stock Exchange, the companies announced in a statement Tuesday. The announcement confirms talks made official on Monday and first reported by Bloomberg last week.

The deal will give Eutelsat a “unique position” on the market and has the potential to generate 1.5 billion euros ($1.53 billion) in increased revenue as well as investments and cost synergies, the companies said. Eutelsat shares dropped 18 percent yesterday after announcing deal talks.

The company’s new board will include Eutelsat chairman and CEO, alongside OneWeb’s CEO, and independent shareholders chosen by both company in an extraordinary general meeting.

It is not said whether the French and British states, both shareholders, will be represented, but the UK will continue to own a special share, giving it certain veto rights over strategic decisions such as the location of the firm’s headquarters.

The new company will combine Eutelsat’s geostationary earth orbit satellites and OneWeb’s low orbit satellites. Eva Berneke, Eutelsat’s Chief Executive Officer said Eutelsat’s “initial investment in OneWeb was underpinned by our strong belief that the future growth in Connectivity will be driven by both GEO and LEO capacity.”

OneWeb shareholders would receive 230 million newly issued Eutelsat shares representing 50 percent of the enlarged share capital. The combined entity is set to have a 1.2 billion euros revenue and 0.7 billion euros EBITDA for fiscal 2022-2023.

On Tuesday, Eutelsat published results showing 1.15 billion euros full year revenue, declining by 6.7 percent, in line with estimates.