Two of Europe’s biggest internet satellite companies are merging to take on Starlink

Internet satellite operators and are planning a merger in hopes of becoming a stronger rival to SpaceX. The merger, which is subject to regulatory and Eutelsat shareholder approval, is expected to occur in mid-2023 and value OneWeb at $3.4 billion. OneWeb and Eutelsat shareholders will each own half of the combined company.

Eutelsat has a fleet of 36 satellites in geostationary orbit. These will be combined with the cluster of OneWeb satellites in low-Earth orbit, providing internet access from the sky. OneWeb currently has 428 satellites in orbit out of a planned 648 in its first generation network.

OneWeb and Eutelsat expect combined revenue of 1.2 billion euros ($1.56 billion) in fiscal year 2022-23. Eutelsat Chairman Dominique D’Hinnin and CEO Eva Berneke will retain these positions in the merged entity. OneWeb investor Sunil Bharti Mittal becomes co-chair.

The merger comes after OneWeb failed in its attempt to become a viable competitor to Starlink and Amazon. OneWeb in March 2020 looking for a buyer. The UK government and Mittal’s Bharti Global each paid $500 million for OneWeb. The company is scheduled to launch hundreds of satellites in early 2021.

More recently, OneWeb found itself caught between Russia and the West following the invasion of Ukraine. British sanctions prompted Russia to block the launch of OneWeb satellites – it demanded that Britain sell its stake in OneWeb and wanted assurances that the satellites would not be used for military purposes. OneWeb eventually launched the rest of its first-generation satellites.

Following the anticipated merger, the UK will acquire OneWeb as well as exclusive rights over the company. These give the government a significant say in national security control over the network and veto power over certain decisions, such as the location of OneWeb’s headquarters.

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