Planned £5.4bn takeover of Inmarsat thrown into doubt

The planned £5.4billion takeover of Inmarsat has been thrown into doubt as its buyer desperately seeks to overcome Government opposition. 

American group Viasat swooped on the British satellite group last year and has put forward a series of proposals to get the deal over the line. 

The tie-up is being scrutinised by ministers and both sides have held talks to thrash out an agreement. 

Viasat’s pledges include creating jobs and keeping Inmarsat’s headquarters in the UK. 

But the Government believes these promises are too superficial, a Downing Street source told the Mail. 

Ministers want firmer commitments – including that Viasat will invest in innovative projects. 

Sources close to the company last night said they believe it has made a breakthrough in recent discussions. 

One told the Mail that there had been ‘endorsement from the Government so far.’ 

But a Whitehall source suggested no such breakthrough had been made and that laws could still be used to call in the deal and investigate whether it is a threat to national security. 

Inmarsat is the largest provider of in-flight Wi-Fi for airlines and the leading provider of internet connections for ships. It has 14 satellites in orbit and plans to launch another seven in future. 

Most of its 2,000-strong workforce is based in the UK. 

It was taken private in 2019 for £4.7billion by foreign private equity groups including Warburg Pincus, but was put up for sale last year. 

The Inmarsat tie-up is one in a line of controversial aerospace and defence takeovers to rock UK industry in recent years. 

There are fears Inmarsat could suffer the same fate as aerospace group Cobham, which was carved up 18 months after it was bought by US private equity firm Advent. 

The Government has been so worried about the string of selloffs it has brought in laws to protect firms in sensitive industries – including space – which include automatically screening deals. 

However, the Inmarsat deal was launched before the National Security and Investment Act came into effect in January. 

This means that all talks between the Government and the company are unofficial. But if ministers believe the deal could pose a threat to national security, they could invoke the law to start an official investigation. 

Viasat boss Rick Baldridge previously told the Mail his company sees Inmarsat as a long-term investment. He added that Viasat could sell some of Inmarsat’s US operations if it does not fit with the company far into the future, but added that the company has been around for 35 years and has not sold anything to date. 

Viasat invested £300m in a cyber centre in Aldershot, Hampshire, last year, and does other work in the UK. Baldridge has said: ‘We’ve already been making hundreds of millions of dollars in commitment here.’ 

But critics have said any promises made by Viasat must be cast-iron, multi-year legal commitments for Inmarsat to avoid the fate of Cobham. A Viasat spokesman said it is ‘grateful for the constructive engagement’ with the Government.