Published: Wed, March 01, 2017
Science | By Boyd Webster

Satellite operators OneWeb, Intelsat plan conditional merger

Satellite operators OneWeb, Intelsat plan conditional merger

Japanese technology investor Softbank is lining up a merger between its OneWeb investment and rival Intelsat, according to reports. The talks are still in progress and could still fall apart, and OneWeb has other options beside Intelsat, the person said.

An artist's conception shows a OneWeb satellite in orbit. It plans to launch 10 production satellites in early 2018, and is hoping to start providing its first internet access by 2019. By combining, the companies could potentially save on network costs and expand the types of customers Intelsat has.

Last a year ago, U.S. President Donald Trump said those ties would allow the Japanese firm to bring 8,000 jobs to the United States in a statement that followed Son's vow to create 50,000 more though a tech investment fund established with a Saudi billionaire.

"If the transaction is completed, OneWeb's low earth orbit ('LEO') satellites, combined with Intelsat's geostationary orbit ('GEO') satellites would accelerate the combined company's strategic growth plans to offer a truly global and affordable networking solution", the companies said. Intelsat's Spengler will be the CEO of the combined company and OneWeb's Wyler will be the executive chairman of the combined company's Board of Directors.

Pluses for Intelsat with such an acquisition would include expansion of their customer base into areas now not addressed by their services as well as network cost savings-they also have radio-frequency licenses that would be highly valued in providing Internet to airlines, such as Gogo, Inc., which is now working with both firms on such services.

OneWeb is the latest creation of Greg Wyler, who has spent more than a decade trying to connect poorer, less-developed parts of the world to the internet.

The Boeing Co. also has floated plans for a global satellite network. The deal will give SoftBank a 39.9 percent voting stake in the merged company.

SoftBank a year ago announced its first investment in OneWeb after its chief executive Masayoshi Son met President Donald Trump and pledged to invest $50 billion in the USA economy and create 50,000 jobs. T-Mobile CEO John Legere told CNBC that he was "humored by this conversation that's going on".

OneWeb shareholders will receive Intelsat common shares in exchange for their shares while Intelsat shareholders will retain the shares they now hold, the companies said.

"This combination is consistent with SoftBank's strategy of investing in disruptive, foundational technologies that are building the infrastructure for tomorrow", Son said.

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