France’s Eutelsat confirms merger talks with UK satellite firm OneWeb

theguardian.com:

A French satellite company has confirmed it is in merger talks with British rival OneWeb, which is part-owned by the UK government, to create a competitor to ventures backed by Elon Musk and Amazon.

Eutelsat said it was in discussions with OneWeb, which provides broadband coverage from space, to create a business that would be 50/50 owned by shareholders in both companies. The British government owns nearly 20% of OneWeb, while the French and Chinese governments hold stakes of 20% and 5% respectively in Eutelsat.

“Following recent market rumours, Eutelsat Communications confirms that it has engaged in discussions with its co-shareholders in OneWeb regarding a potential all-share combination,” said the French satellite firm, which owns nearly 23% of OneWeb.

Reports of the potential deal, which will involve OneWeb shareholders receiving newly issued stock in Eutelsat, first emerged over the weekend. Shares in Paris-listed company fell 10% on Monday after confirmation of the talks.

The transaction aims to strengthen both companies in the race to build a constellation of low-orbit satellites, challenging Elon Musk’s Starlink and Amazon’s Project Kuiper. Eutelsat said it estimated the “satellite connectivity” market to be worth about $16bn (£13bn) by 2030.

The Financial Times reported that the UK and French government would each have board members in the new business created by the deal. It also said Sunil Bharti Mittal, whose Bharti telecoms business is the largest shareholder in OneWeb with a 38.6% stake, was expected to become co-chair of the business with an 18% shareholding.

The UK government’s decision to step in to save OneWeb was controversial at the time. The £400m rescue package, which bought a third of the troubled