Eutelsat, France-based satellite company, is in talks to buy British rival OneWeb in a deal that could be announced as early as Monday, Reuters news report said.
OneWeb was valued at $3.4 billion in its most recent funding round. Eutelsat already has a 23 percent stake in OneWeb and is its second-biggest shareholder. India-based Bharti Global is OneWeb’s biggest shareholder.

The merger of the two companies would strengthen their position in the race to build a constellation of low-orbit satellites, challenging Elon Musk-owned SpaceX’s Starlink and Amazon.com Project Kuiper.

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

The tie-up is politically sensitive, as it would bring Indian billionaire Sunil Bharti Mittal, France, China and Britain together as shareholders of the combined entity.

Eutelsat’s biggest shareholder is France’s state-owned investment bank Bpifrance, with a 20 percent stake. Its fourth-largest shareholder is China’s sovereign fund China Investment Corporation. If the deal happens, this will be the largest satellite deal done by Eutelsat CEO Eva Berneke.

OneWeb was rescued from bankruptcy by the British government and India’s Bharti Global. The takeover will leave the British government with a minority stake in the merged business.

Eutelsat has a market value of 2.4 billion euros ($2.45 billion) on the Paris stock exchange, with a net debt of 3 billion euros as of the end of 2021. Eutelsat has reported revenue of €287 million in third quarter ended 31 March 2022.

Britain will retain special rights over OneWeb after the deal including a veto over sales to clients deemed dangerous for security reasons and a veto over a change in the location of headquarters, the report said.