Oneweb, Backed by Softbank Plans to Merge with Intelsat SA

Company - Pavan Pandey - Mar 01,2017

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oneweb backed by softbank plans to merge with intelsat sa

The merger would ultimately make a combined network of hundreds or even thousands of satellites in low and high altitudes around the globe.

On Tuesday, Japan’s SoftBank Group Corporation declared a plan to merge OneWeb with Intelsat SA. It also plans to invest $1.7 billion to buy 39.9% shares in the combined company, at nearly $5 per share for common stock.

SoftBank has a 40 percent shares in US satellite operator startup, OneWeb Ltd. The unification will also help OneWeb to develop its services.

According to the chief executive officer of SoftBank Group Corp., Mr. Masayoshi Son, the proposed deal offers a very best opportunity to boost OneWeb’s operation and also increase the balance sheet of Intelsat SA. 

Luxembourg-based Intelsat SA is a five-decade-old satellite pioneer, which broadcasted Neil Armstrong’s satellite, Apollo 11, in July 1969.

He added: Adding thousands of satellites could help SoftBank Group and its holdings (including US-based Sprint Corporation) to improve their high-speed internet abilities.

According to terms of the deal, OneWeb, the rival of Elon Musk’s SpaceX, will merge with the publicly traded Intelsat SA in an all-stock deal. Intelsat is also a small stakeholder in OneWeb.

The Chief Executive Officer and founder of OneWeb Ltd., Mr. Greg Wyler, stated "It will enable a smooth upgrade path for the customers ... similar to when your cell operator moves you from 2G to 3G to 4G to LTE and eventually 5G."

The chief executive of Intelsat, Stephen Spengler, would lead the combined company, which has not yet been titled, and Mr. Greg Wyler would be board chairman. The combined company is planned to establish in the Luxembourg City and will trade on NYSE (New York Stock Exchange). 

The proposed deal is scheduled to close this summer. The investment of SoftBank and merger are both conditional on authorization from the shareholders of Intelsat SA.