Eutelsat to buy OneWeb in all-share deal

Eutelsat Communications and OneWeb announced their merger to create an entity with revenues of €1.2 billion and EBITDA of €0.7 billion in FY22-23.
Eutelsat CEO Eva BernekeRevenues are forecast to grow at low double-digit CAGR over the next decade. EBITDA is expected to grow at a mid-teen CAGR over the medium to long term, outpacing sales growth. The Capex of the combined entity is estimated in average at some €725 million to €875 million, per annum, over the period FY23-24 – FY29-30.

The all-share transaction — valuing OneWeb at $3.4 billion — will enable Eutelsat to combine its 36-strong fleet of GEO satellites with OneWeb’s constellation of 648 Low Earth Orbit satellites, of which 428 are currently in orbit.

Eutelsat would own 100 percent of OneWeb. OneWeb shareholders would receive 230 million Eutelsat shares representing 50 percent of the enlarged share capital.

Eutelsat CEO Eva Berneke said: “The combination will create a powerful global player with the financial strength and technical expertise to accelerate both OneWeb’s commercial deployment, and Eutelsat’s pivot to Connectivity.”

The combination of Eutelsat with OneWeb is forecast to generate substantial value: Annual revenue synergies are estimated at circa €150 million after four years, with hybrid GEO/LEO offerings providing a premium service to customers as well as improving the fill rate. Synergies from joining organizational forces are expected to generate annual run-rate savings of over €80 million pre-tax after five years, mostly through cost duplication avoidance.

Capex optimization is expected to generate average savings estimated at circa €80 million per annum, from year one. This would be achieved by leveraging the hybrid GEO/LEO satellite infrastructure and through the improved purchasing power of the combined entity.

Dominique D’Hinnin would be proposed as Chairman of the combined entity and Sunil Bharti Mittal as Co-Chairman (Vice-President). Eva Berneke would continue as CEO of the combined entity.

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