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Eutelsat, Britain’s OneWeb sign initial merger deal

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PARIS — French satellite company Eutelsat and British rival OneWeb said they had signed an initial merger deal, which could help them challenge the likes of Elon Musk-owned SpaceX’s Starlink and’s Project Kuiper.

The transaction, which values OneWeb at $3.4 billion, would be structured as an exchange of OneWeb shares by its shareholders with new shares issued by Eutelsat, leaving the latter owning 100% of OneWeb.

A deal would combine the companies’ resources in the race to build a constellation of low-orbit satellites. It is also potentially sensitive politically, as it would bring together Indian billionaire Sunil Bharti Mittal, along with France, China and Britain, as shareholders of the combined group.

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Demand for satellite launches is expected to accelerate after recent sanctions sidelined the Russian space launch industry, and giant satellite constellations could offer a new channel to beam broadband Internet from space.

Eutelsat and OneWeb said their new, combined entity would have revenue of about 1.2 billion euros ($1.23 billion) and core EBITDA earnings around 0.7 billion euros by the 2022/2023 financial year, while revenue was forecast to grow at a low double-digit compound annual growth rate (CAGR) over the next decade.

Eutelsat’s Dominique D’Hinnin would be chairman of the combined entity. OneWeb’s Sunil Bharti Mittal would also be co-chairman, while Eva Berneke would be CEO of the combined entity. ($1 = 0.9779 euros) (Reporting by Sudip Kar-Gupta; Editing by Clarence Fernandez and Edmund Klamann)

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