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Eutelsat and OneWEB to merge

Eutelsat announced that it was in talks to merge with OneWEB. This operation would create one of the largest multi orbital satellite operator with SES, active in both GEO and LEO altitudes. Eutelsat already owns a 23% stake in OneWEB ; this bold move happens just a few months after the departure of Rodolphe Belmer as CEO and the appointment of Eva Berneke. Eutelsat has been struggling to find a strategic direction to compensate the declining broadcast market. After a few years trying to develop a satellite IoT actvity with its ELO program that demonstrated an absnce of knowlegde both on the technical issues and the business development aspects, Eutelsat has finally come to a decision more in line with its culture and existing business. It must be stressed that OneWEB has already more than half of its projected constellation in orbit: thus the technical and regulatory risks are much lower. However, the business risk is still there and has been the major risk in launching a LEO satellite venture. In addition, the Russian situation is delaying the launch of the rest of its constellation.

Along with the business risk, lies the political risk. So far, Eutelsat has been pushing to be part of the so called European secured constellation. However, it seems that the agreement with OneWEB will make it difficult as the UK Governement will still has a golden share. Thus the EC has already expressed that it will continue on its constellation project, disregarding what Eutelsat could propose.

On a last note, the transaction valued OneWEB at 3.4B€ while at the time Eutelsat was valued at around 2.4B€ (NB: its shares dropped after the announcement to 1.7B€). This seems to clearly show that the growth perspectives are on the LEO side rather than on the existing GEO business. OneWEB still has to demonstrate that it will reach its market goals.

Here is the official pres release:

The opinion of EU member of parliament Christophe Grudler (in French):

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