On Thursday local time, French satellite company Eutelsat and its British counterpart OneWeb announced that the two companies have completed their merger and become Europe's largest satellite company to better compete with Musk's Starlink project. The two companies jointly stated that they have completed the merger of all shares and the merged company will be named Eutelsat Group. The new company will remain headquartered and listed in Paris and has applied to be listed on the London Stock Exchange.
Eutelsat said the new company's revenue is expected to grow at a double-digit compound annual growth rate in the medium to long term, reaching about 2 billion euros ($2.11 billion) in 2027. Capital expenditures are expected to be approximately 725 million to 875 million euros per year between 2024 and 2030.
The new company is positioned to become a global leader in space communications and hopes to combine the advantages of Eutelsat's high-throughput geostationary orbit satellites (GEO) with OneWeb's low-orbit earth satellites (LEO) to provide customers with low-latency and ubiquitous high-density networks.
Eutelsat Group CEO Eva Berneke said: "Eutelsat Group is the only GEO-LEO operator in the global satellite communications field that can provide ubiquitous connectivity services. Achieving global interconnection is an important and exciting challenge. We can meet a wider range of customer needs, and as we continue to innovate and develop future generations of satellite technology, we can create great value for customers and shareholders."
In July last year, the two companies announced an agreement to merge in an all-stock transaction to become Europe's largest satellite company to challenge Musk's Starlink project and Amazon's Kuiper program.
After the news was released, Eutelsat's share price rose 6%. However, Thomas Coudry, an analyst at Bryan Garnier, said: "The share price increase is negligible compared with the losses since the merger was announced."
Eutelsat shares are down about 49.4% since the merger was first announced in July 2022. Coudry pointed out that the merger would be painful for minority shareholders because the investment required by OneWeb will consume a lot of cash flow in the long term, and the return on investment is uncertain.
Some Eutelsat investors had objected to the OneWeb deal because it could cause Eutelsat to stop paying dividends to shareholders while it makes large investments.
Meanwhile, competition among different players in the multi-hundred-billion-dollar space industry is heating up. Analysts at Morgan Stanley previously estimated that the global aerospace industry will be worth more than $1 trillion by 2040, compared with the current value of about $550 billion.
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