UK to investigate Viasat’s $7.3 bn deal for Inmarsat

The Competition and Markets Authority (CMA), the competition regulator in the UK, will conduct an in-depth investigation about Viasat’s $7.3 billion takeover of satellite rival Inmarsat.
Viasat booth at a trade eventUnited States-based Viasat announced its plans to buy British company Inmarsat late last year and was expected to close in the second half of this year, but the Competition and Markets Authority (CMA) has 24 weeks to complete its investigation.

The CMA’s concern is that the deal could hurt competition in the aviation connectivity market, leading to airlines facing higher prices for on-board Wi-Fi.

In-flight connectivity (IFC) is an attractive market which is also attracting new providers such as Starlink, Eutelsat/OneWeb and Telesat. Over the last three years these new market entrants raised over $20 billion in new capital illustrating both the attractiveness of the markets and the intensity of competition.

Mark Dankberg, Viasat’s CEO and executive chairman, said: “Our market success to date has been driven by applying innovative technologies to increase IFC speeds, reliability, and affordability. Our investments in the ViaSat-3 constellation and the Inmarsat transaction are intended to help us make these services more available globally.”

Rajeev Suri, Inmarsat CEO, said: “Inmarsat faces competition every day in providing in-flight connectivity. There is reason to expect that intensity to increase given the power of well-funded new companies entering the sector.”

The transaction has secured key regulatory approvals, most recently with the UK Government’s clearance of the proposed transaction under the National Security and Investment Act, and over the summer from the Committee on Foreign Investment in the United States.

Viasat offers connectivity services to residential, aviation and defense customers in North America while Inmarsat provides satellite-based communications services to the shipping and aviation sectors as well as government departments.

The two companies said they remain confident that the deal would go through and increase availability of affordable in-flight Wi-Fi, noting that rivals Panasonic and Intelsat account for more than 75 percent of the market on long-haul flights.

Viasat and Inmarsat’s joint statement said they will communicate any expected delay to the closing of the deal as their engagement with the CMA progresses.

CMA said the deal requires further investigation because it could result in a substantial lessening of competition within a market or markets” in the UK, based on the information it currently has.