SES has confirmed that it is negotiating a merger with a competitor, Intelsat. The purpose of the merger is to create a satellite giant that can better compete with the company of billionaire Elon Musk. The estimated value of the deal is $10 billion.
Satellite communications operator SES, based in Luxembourg, has confirmed that it is indeed in talks about a possible merger with Intelsat. “But at this stage, there can be no certainty that the transaction will take place,” the company explained.
SES aims to reach an agreement with Intelsat in the coming weeks. According to Bloomberg , the deal could value the combined business at more than $10 billion, including debt.
The market value of SES is approximately 2.6 billion euros (2.7 billion dollars). The Luxembourg government is the largest shareholder in SES.
The merger will help SES strengthen its position as it faces new competition. The plans of Elon Musk and his fellow tycoon Jeff Bezos to launch thousands of spacecraft into lower orbits and cover the Earth with high-speed broadband are pushing players in the traditional satellite industry to merge.
California-based Viasat has agreed to buy UK-based Inmarsat in 2021 for around $4 billion in cash and shares. French company Eutelsat Communications is buying OneWeb in a $3.4 billion stock-settled deal. The deal is expected to close in the second or third quarter of this year. This will allow the company to start offering high-speed Internet services via satellite.
Intelsat emerged from bankruptcy last February, cutting its $16 billion debt in half.
SES provides video content from various broadcasters. It also provides broadband services to customers outside the reach of traditional Internet service providers such as cruise ships and aircraft.