The possible merger between Intelsat and the satellite operator SES seems to have come to an end. This union between both companies, which was going to assume a common force and become a giant of satellitesin order to face growing competition, finally has not come to fruition according to sources.
To this end, the American Intelsat does not seem to have been able to reach an agreement with SES and its main shareholders, whose identity is unknown, and has put an end to the negotiations. The operation between both companies was stipulated in more than 10,000 million dollars.
What could have been but was not
The satellite industry was experiencing convulsive movements with the arrival of new companies in the sector and endangering the predominance of existing ones. In response to this fact, the news broke when it became known that Intelsat and SES were trying to reach a merger agreement.
The operation, which was materialized in a figure greater than 10,000 million dollars, was in a very advanced state, as confirmed by SES itself: “In response to the rumors in the market, SES SA confirms that the company has begun discussions about a possible combination with Intelsat. At this stage, there can be no certainty that a transaction will materialize.”
The attraction of this business agreement revolved around the possibility that both had of share the costs of launching and developing the satellites. Different analysts estimated that the savings were around a present net value of almost 3,000 million dollars.
Both companies control over 40% of the market for fixed satellite services. And it is that the company SES, based in Luxembourg, has a market value of around 2,400 million dollars while Intelsat is close to 3,000 million dollars. The Luxembourg government played an important role in the operation, which is the largest shareholder of SES and was considered a key player in securing the merger agreement.
Given this break with SES, Intelsat clarified through a statement that they are engaged in strategic discussions with potential partners. on a regular basis, and will not clarify the content or outcome of such discussions.
Rising satellite competition
The operation that would have helped the two operators to join forces to face the increasingly high competition in the market, has now left a market much more open and prone to growth. The merger would have marked the largest consolidation in the satellite internet industry.
The truth is that the market does not stop moving and that is that in July of last year, the French satellite firm Eutelsat announced an agreement to merge with OneWeb of Great Britain, trying to challenge and deal with Elon Musk’s company, Starlink from SpaceX, and Amazon-owned Project Kuiper.
The situation now paints a picture where billionaires Elon Musk and Jeff Bezos are launching thousands of spacecraft into lower orbits to cover internet access.
Meanwhile, the situation that Intelsat and SES are going through is calm to say the least. So that SES announced earlier this month that Steve Collar, the company’s chief executive, would be stepping down. at the end of the month. The position will be filled by Ruy Pinto, CTO, while a permanent successor is named. For its part, last year Intelsat emerged from a difficult economic situation, in which it had to face a debt of 16,000 million dollars.
