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SES is acquiring satellite services provider Intelsat for $3.1bn in an all-share deal that marks the last major consolidation in the industry, as operators look to compete against new rivals such as Elon Musk’s Starlink.
Luxembourg-based SES and US group Intelsat said in a joint statement on Tuesday that the combination — which gives Intelsat an implied enterprise value of $5bn — would create a “stronger multi-orbit operator” and deliver synergies worth €2.4bn.
The companies previously held talks about a potential combination in 2022 as a wave of mergers and acquisitions swept across the satellite industry.
French satellite operator Eutelsat and UK start-up OneWeb announced a merger that year, while US satellite company Viasat in 2021 said it would acquire Britain’s Inmarsat in a $7.3bn deal.
Musk’s SpaceX, which runs the low-earth orbit (LEO) broadband network Starlink, and Project Kuiper, Amazon’s LEO satellite broadband initiative, which is yet to commercially launch, have shaken up the industry.
They are challenging established operators such as SES, which are suffering from declining broadcast revenues, by offering accessible high speed broadband services even in remote areas.
“This is a highly dynamic market . . . [It] is moving very fast,” said SES chief executive Adel Al-Saleh, who took up his role in February after the abrupt departure of Steve Collar last year. “There are new entrants, there is rapid innovation . . . Having scale and a multi-orbit capability is critical to success.”
The combination of SES and Intelsat will have more than 100 satellites in geostationary orbit, the region about 36,000km above the earth, and a further 26 in medium-earth orbit (MEO). Both also have partnerships with operators of satellites in low earth orbit, which is increasingly attractive because of shorter signal delays compared with geostationary orbit.
The companies said that, combined, they would generate expected revenue of €3.8bn and adjusted earnings before interest, taxes, depreciation and amortisation of €1.8bn.
Al-Saleh said 60 per cent of the combined group’s turnover would be from high growth businesses such as mobility and government services and 40 per cent would be derived from the declining media division, including television broadcasting.
Shares in SES fell 12 per cent in morning trading.
David Wajsgras, chief executive of Intelsat, said the company had “executed a remarkable strategic reset” in the past two years and “reversed a 10-year negative trend to return to growth”.
Intelsat filed for bankruptcy protection in the US in 2020. The company in 2022 announced it had emerged from its financial restructuring process as a private company and reduced its debt from approximately $16bn to $7bn.
Talks between the two companies collapsed last summer after they failed to agree terms, leading to the previous SES chief executive’s sudden departure.
Al-Saleh hinted that the change of management and improvements in the two companies’ situations in the past year had helped smooth a resumption of talks. “Dave and I . . . worked very hard together to figure out how do we make this thing happen.”
Al-Saleh also suggested that the combination could enhance SES’s bid to win a contract for Europe’s planned IRIS² broadband constellation. The European Commission “will also need to ensure that there is high usage of that installation and having a large player like us . . . to be able to leverage the network and drive traffic into the network is very important”.
The deal has been unanimously approved by both companies’ boards and is subject to regulatory approval, which is expected during the second half of 2025, the companies said.
The transaction will be financed from existing cash and equivalents and the issuance of new debt.
The combined SES will continue to be based in Luxembourg and maintain a “significant presence” in the US.
SES on Tuesday also reported a 1.5 per cent year-on-year rise in revenue to €498mn in its first quarter and a 3.8 per cent increase in adjusted earnings before interest, tax, depreciation and amortisation to €275mn over the same period.
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