SES has confirmed its acquisition of rival satellite communications giant Intelsat for $3.1 billion, a strategic move aimed at bolstering its position in a market increasingly disrupted by low Earth orbit (LEO) constellations like Starlink and OneWeb. This transaction, subject to regulatory approval, marks a significant consolidation in the satellite communications industry, combining two of the most substantial operators of geosynchronous Earth orbit (GEO) satellite networks.
“I think we are seeing more waves from the shakeup in the commercial SATCOM market due to Starlink and OneWeb with their lower costs and higher capacity LEO broadband services. The traditional incumbents are being challenged in a major way for the first time in a long time,” remarked Todd Harrison, space industry expert and senior fellow at the American Enterprise Institute.
The acquisition is expected to create a more formidable and diversified multi-orbit operator with a gross contract backlog of €9 billion ($9.63 billion), revenues of €3.8 billion ($4.07 billion), and adjusted EBITDA of €1.8 billion ($1.93 billion). SES CEO Adel Al-Saleh described the deal as a “transformational agreement,” which would expand the company’s “multi-orbit space network, spectrum portfolio, ground infrastructure around the world, go-to-market capabilities, managed service solutions, and financial profile.”
Intelsat CEO David Wajsgras added that the merger would result in “a more competitive, growth-oriented solutions provider in an industry going through disruptive change.”
Both companies have historically supplied SATCOM bandwidth and services to the Defense Department, with SES inking a deal for its O3b mPower broadband constellation and Intelsat participating in the Army’s Satellite Communications (SATCOM) as a Managed Service (SaaMS) pilot.
Analysts have indicated cautious optimism, with Christof Kern, business development lead for satellite and space at consulting company TTP, noting the potential for the new entity to dominate the market and leverage its extensive resources to shape the future of satellite communications. “The combined entity is poised to be the world’s largest satellite company in terms of revenue, and could dominate the market,” Kern said.
Relevant articles:
– SES to buy Intelsat, further shrinking SATCOM gene pool, Breaking Defense, 05/01/2024
– SES to strengthen itself with $3.1B Intelsat acquisition, Light Reading, 04/30/2024
– SES to acquire Intelsat for $3.1 billion, SpaceNews, 04/30/2024
– SES and Intelsat finally tie the knot in $3.1B acquisition, The Register, 04/30/2024
– SES agrees to acquire Intelsat, ComputerWeekly.com, 04/30/2024