 "OneWeb Satellites")
French satellite operator Eutelsat and key shareholders of Bharti-backed OneWeb have inked a pact for merger, entailing all-share transaction, a statement said on Tuesday.
Post closing of the deal, Bharti Group will be the single largest shareholder of Eutelsat.
The transaction values OneWeb at USD 3.4 billion (over Rs 27,000 crore), according to a joint statement.
Eutelsat will combine its strong fleet of 36 Geostationary Orbit (GEO) satellites with OneWeb's constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.
The announcement has a takeaway for the India market as well, where OneWeb had received the letter of intent for the GMPCS (Global Mobile Personal Communication by Satellite) licence from the Department of Telecom.
Earlier this year, OneWeb also inked a pact with the Indian Space Research Organisation's (ISRO) commercial arm for launching satellites.
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"With its uniquely superior GEO/LEO offerings, complementing high throughput with low latency, the combined entity will help bolster the satellite communication capabilities of the nation, catering to the varied range of needs of the private industry as well as the government," the statement said.
Coming at a crucial time when the Indian space policy is on the anvil, the new entity would provide further impetus to the recently-signed agreement on space coordination between India and France.
"As the largest shareholder in the combined entity, Bharti will continue its full interest in OneWeb, via Eutelsat. Sunil Bharti Mittal shall be the Co-chair of the combined listed entity and Shravin Bharti Mittal as the second Bharti Director," the statement said.
It however did not offer details of the specific holding of Bharti Group post deal-closing.
OneWeb India will also become a subsidiary of the Eutelsat JV post FDI clearances, "and with its unique capabilities of covering all unconnected white spaces, is confident of furthering the objective of a digitally connected India".
The statement said operations of Eutelsat and OneWeb are highly complementary. A clear roadmap has been designed to develop over time a complementary GEO/LEO service including a common platform, hybrid terminals and a fully mutualised network.
Low Earth Orbit or LEO satellites are located closer to Earth, compared to GEO satellites. LEO fleet of satellites continuously orbit the earth and are not fixed to a point like GEO satellites.
Dominique D'Hinnin would be proposed as Chairman of the combined entity and Sunil Bharti Mittal as Co-Chairman (Vice-President). Eva Berneke would continue as CEO of the combined entity.
"The transaction would be structured as an exchange of OneWeb shares by its shareholders (other than Eutelsat) with new shares issued by Eutelsat, such that, at closing, Eutelsat would own 100 per cent of OneWeb (excluding the 'Special Share' of the UK Government)," the statement said.
Eutelsat holds 23 per cent stake in OneWeb.
OneWeb shareholders would receive 230 million freshly-issued Eutelsat shares representing 50 per cent of the enlarged share capital.
So, Eutelsat shareholders and OneWeb shareholders would each hold 50 per cent of the Eutelsat shares.
The transaction, which is subject to regulatory approvals, is expected to close by the end of first half of 2023.
"Representing a transformational transaction, built on the strong foundations established in April 2021 with Eutelsat's initial investment in OneWeb, this combination creates a global leader uniquely positioned to capture the connectivity market with complementary GEO/LEO offering," it said.
The combination offers "compelling" financial profile with "potential for double-digit" revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization growth) compound annual growth rate over the medium to long term.
"...Over Euro 1.5 billion potential incremental value-creation after tax (net of implementation costs) stemming from revenue, capex and cost synergies," the statement said.
A balanced board and governance structure would include Eutelsat's Chairman and its CEO, OneWeb's Chairman, and a significant number of independent directors proposed by Eutelsat and OneWeb's shareholders, at Extraordinary General Meeting.
Eutelsat would continue to be listed on Euronext Paris and apply for admission to standard listing on the London Stock Exchange.
OneWeb's Executive Chairman Sunil Bharti Mittal, said he is "excited" about the possibilities of connecting the unconnected.
"The combination of Eutelsat and OneWeb represents a significant development in that direction as well as a unique GEO/LEO combination.
"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," Mittal said.
He added: "Our customers are actively seeking a combined GEO/LEO offering leading us towards this important step".
Trading under its existing name, OneWeb will continue to operate the LEO business, with OneWeb's headquarters remaining in the UK.
Eutelsat will continue to be headquartered and domiciled in France.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
