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April 30, 2024

Intelsat board approves €2.8bn takeover bid from rival SES

The deal comes amid heightened competition from LEO operators with both SES and Intelsat. 

By Greg Noone

The board of Intelsat has unanimously approved a takeover bid from rival satellite company SES. A joint announcement from the companies revealed that SES has offered to buy all shares in the Luxembourg satellite firm for €2.8bn. It added that the takeover served the mutual interests of both companies in creating a more resilient, multi-orbit satellite operator. 

“In a fast-moving and competitive satellite communication industry, this transaction expands our multi-orbit space network, spectrum portfolio, ground infrastructure around the world, go-to-market capabilities, managed service solutions and financial profile,” said Adel Al-Saleh, SES’ chief executive, in a statement. “Going forward, customers will benefit from a more competitive portfolio of solutions with end-to-end offerings in valuable Government and Mobility segments, combined with value-added, efficient, and reliable offerings for Fixed Data and Media customers.”

A satellite in Earth orbit, used to illustrate a story about Intelsat.
A takeover bid for Intelsat from SES comes amid growing consolidation in the satellite industry. (Photo by Shutterstock)

Intelsat and SES deal will combine fleet of GEO and MEO satellites

Though approved by Intelsat’s board, SES’s takeover bid will still have to be approved by multiple national regulators, which both firms expect to receive by the second half of 2025. If completed, it is estimated that the company which emerges will have a revenue of €3.8bn and an adjusted EBITDA of €1.8bn. 

“With a combined fleet of more than 100 Geostationary Earth Orbit (GEO) and 26 Medium Earth Orbit (MEO) satellites, the combined SES will benefit from enhanced coverage, greater network resiliency, complementary spectrum (C-, Ku-, Ka-, Military Ka-, X-band, and Ultra High Frequency) rights, and improved service delivery utilising an expanded network of ground segment assets,” said the two firms. “By end-2026, 8 new GEO (including 6 software-defined) satellites and 7 new MEO (O3b mPOWER) satellites are expected to be launched, adding further redundancy and additional growth capacity.”

More competition in market from LEO rivals

The takeover comes amid growing competition in the satellite market driven by the emergence of Low Earth Orbit operators like Elon Musk’s Starlink, Amazon’s Project Kuiper and OneWeb. All three operate satellite constellations that are more affordable to launch and maintain than the more complex communications satellites maintained in geostationary (GEO) orbits, while providing wider connectivity options to customers back on Earth. 

More established players have attempted to solve this problem through consolidation. After having been bailed out by the UK government during the pandemic, LEO constellation operator OneWeb eventually merged with Eutelsat in 2023 in a deal valuing the former company at $3.4bn. In March of this year, Eutelsat then signed a $500m agreement to integrate OneWeb’s LEO constellations with Intelsat’s GEO and terrestrial networks. This followed a previous attempted merger between SES and Intelsat. On that occasion, however, talks between the two rivals broke down, which Bloomberg attributed at the time to an inability to agree on the future direction of the new business. 

Read more: OneWeb and the UK’s post-Brexit space strategy

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