France’s Eutelsat Invests $550 Million in Musk Satellite Rival OneWeb

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Eutelsat Communications SA will pay $550 million in cash for a 24% stake in low-earth orbit satellite startup OneWeb, it said Tuesday.

The Paris-based operator’s investment will be funded by proceeds from selling airwaves to U.S. phone operators, Eutelsat said in a statement. It will gain seats on OneWeb’s board, and the transaction will dilute the stakes of its other major shareholders, the British government, Indian telecom group Bharti Global, and SoftBank Corp. Britain retains a golden share giving it veto powers on deals.

OneWeb was rescued from bankruptcy in 2020 by Bharti and the U.K. and plans to launch an initial fleet of 648 satellites into low-earth orbit to beam broadband around the globe. As of yesterday, it has launched 182.

The deal comes amid a rush to establish low-earth orbit satellite constellations led by Elon Musk, whose Starlink system has launched well over 1,000 spacecraft. Amazon.com Inc founder Jeff Bezos is planning a rival system.

Eutelsat currently operates satellites for clients like government and TV broadcasters from higher geostationary orbit. This doesn’t offer the same quick reaction speeds, called low latency, as those promised by OneWeb. Eutelsat expects the deal to close in the second half of 2021, pending regulatory approval.

OneWeb said in a separate statement it expects annual sales of about $1 billion through wholesale deals within about three years of its constellation being fully deployed. It’s now 80% funded, it added. UBS advised OneWeb on the deal.

©2021 Bloomberg L.P.

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