Eutelsat signs final agreement to combine with OneWeb

Satellite operator Eutelsat has signed a final agreement covering its acquisition of low-Earth orbit satellite outfit OneWeb from Bharti, Softbank, Hanwha and the UK government, following approval by its board of directors. The acquisition is still subject to regulatory approval.

Eutelsat said that given the currently expected timetable for review by the relevant authorities, the EGM of Eutelsat shareholders called to approve the transaction is now expected to be held in the second or third quarter of 2023.

The company said that the possible change from the initially announced timetable should have no significant impact on the combined entity’s financial outlook released in connection with the proposed combination.

When the deal is completed, the combined companies’ board will comprise 15 directors, including the current chairman of Eutelsat, Dominique d’Hinnin, who will be chair of the combined company, Eutelsat’s CEO Eve Berneke, who will remain in her post, two directors proposed by Bharti, including Sunil Bharti Mittal as Co-Chairman, one director proposed by Bpifrance Participations, one director proposed by the UK Government, one independent director representing Fonds Stratégique de Participations, one independent director proposed by Hanwha, three independent directors proposed by OneWeb and four independent directors proposed by the Board of Directors of Eutelsat, three of whom are to be selected from among the current directors of Eutelsat.

Eutelsat and OneWeb recently provided a Capital Markets Day strategic update in which they said that they expect the enlarged company to achieved double digit revenue growth “over the medium to long-term”. If proved correct, they will top revenues of €2bn and EBITDA of €1.4bn in 2027.

The acquisition has not met with universal approval, with some analysts questioning the wisdom of a combination that potentially changes the investment case and risk profile of Eutelsat.