Satellite of love: SES and Intelsat finally tie the knot in $3.1B acquisition

Second time lucky as competition from Starlink and pals increases

Satellite operator SES is to acquire Intelsat for $3.1 billion, creating an entity with more than 100 Geostationary Earth Orbit (GEO) and 26 Medium Earth Orbit (MEO) satellites.

The deal follows an attempt last year in which the companies failed to find "a path to an agreement which would be acceptable to both parties."

The transaction will be financed from $2.4 billion in existing cash and equivalents from SES, and the rest will be made up of debt. The combined company will be headquartered in Luxembourg while maintaining a significant presence in the US.

The arrival of Low Earth Orbit constellations, such as SpaceX's Starlink, has made the communications satellite business increasingly competitive and consolidation inevitable. According to SES, the combined group will provide "a compelling alternative in the new era of growth, innovation, and competition for the satellite communications industry."

It will need to. The two companies complement each other in the mobility sector. SES's maritime business supports five major cruise line operators, while Intelsat's commercial aviation division serves nearly 3,000 connected aircraft. However, competition from rivals such as Starlink, OneWeb, and Amazon's Project Kuiper threatens those revenues.

SES CEO Adel Al-Saleh joined the company in February 2024, when the acquisition wheels were put in motion. SES also announced its Q1 2024 results, which showed revenue of €498 million, up 2.5 percent year-on-year. 54 percent of revenue was classified as networks, increasing by 9.6 percent year-on-year, while video fell by 5.2 percent to €228 million.

The shift from video to network traffic, driven by 24.5 percent growth in Mobility, indicates the direction of travel away from the formerly lucrative television sector. In the acquisition announcement, it was estimated that the networks segment would account for approximately 60 percent of the expanded revenue base. The integrated company will also have a combined gross backlog of €9 billion (as of December 31, 2023).

Christof Kern, Business Development Lead for Satellite & Space at TTP, saw benefits in the deal as well as future opportunities. "The acquisition of Intelsat by SES marks a significant milestone in the satellite communications industry. Bringing together two legacy giants from Europe and the US, both companies are focused on driving efficiencies and maximizing their investments in both Geostationary Earth Orbit (GEO) and Medium Earth Orbit (MEO) satellites.

"However, based on the operating efficiencies gained, there's potential for deploying Low Earth Orbit (LEO) satellites in the future to meet high-bandwidth and low-latency connectivity demands when required.

"With confidence in the competitiveness of these satellites, when compared to Starlink's LEO constellation, the combined entity will be able to offer wider coverage of the Earth's surface at a more affordable cost, albeit at higher latency."

Looking ahead, eight new GEO (including six software-defined) satellites and seven new MEO (O3b mPOWER) satellites are expected to be launched by the end of 2026.

The deal is subject to regulatory clearances, which are expected to be received during the second half of 2025. The transaction has been unanimously approved by the Boards of Directors of both companies. ®

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