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If the transaction goes through, SES and Intelsat will form a single company valued at about $10 billion including debt.
In a statement to shareholders, SES SA (LuxSE: SESG), a Luxembourgish satellite telecommunications network provider, noted that it is in advanced merger talks with Intelsat S.A, a multinational satellite services provider. Founded in 1985, SES has grown to a globally respected satellite service provider with over 70 satellites in two different orbits – geostationary orbit (GEO) and medium Earth orbit (MEO). On the other hand, Intelsat announced a fleet of 52 satellites as of June last year.
As a result, their merger could take on Billionaire Elon Musk’s Space Exploration Technologies Corp. alias SpaceX, which takes pride in over 3,300 small satellites in orbit. Founded in California back in 2002, SpaceX has several projects in the pipeline to help it colonize Mars including Starship among others.
If the transaction goes through, SES and Intelsat will form a single company valued at about $10 billion including debt. As a result, the two Luxembourg-based companies will be more equipped to take on SpaceX’s Starlink and Amazon.com Inc’s (NASDAQ: AMZN) Project Kuiper.
Two Luxembourg-based satellite rivals are weighing a merger to take on billionaire Elon Musk https://t.co/cjOILApOvT
— Bloomberg (@business) April 2, 2023
Nevertheless, SES noted that the deal at this stage is not guaranteed to materialize. Moreover, besides the board meetings, there are regulations to be met including anti-competition both in Europe and in the United States.
“In response to rumors in the market, SES SA confirms that the company has engaged in discussions regarding a possible combination with Intelsat. At this stage, there can be no certainty that a transaction would materialize. The Board of SES remains fully committed to acting in the best interest of SES and its shareholders,” SES noted in a statement.
Bigger Picture of Potential SES and Intelsat Merger
The evolution of the internet has seen technology companies push their boundaries to provide dedicated internet services around the world. Moreover, global geopolitical differences have seen the involvement of governments in the technology sector to control global markets. For instance, SpaceX has been awarded several billion-dollar deals by the United States government to provide its services.
Mid-last month, Intelsat announced that it was awarded the Aerospace/Aviation Mobile Innovation Award for FlexExec by the Mobile Satellite Users Association (MSUA).
“Keeping people and machines always connected while on the move is critical to business, whether on land, in the air or at sea,” said Mark Rasmussen, Intelsat’s senior vice president of Mobility.
With SES taking pride in a wide range of customers including broadcasters, sports organizations, governments, and the cruise industry, among others, a successful merger with Intelsat will be strategic to widening global coverage. Moreover, cloud storage and fast internet services are expected to play a crucial role in business expansion in the coming decades.