The French group Eutelsat Communications announced that the merger should increase its annual sales to ?2 billion.

The world’s third biggest satellite operator by revenue, Eutelsat Communications, has announced that the merger between Britain’s OneWeb and itself should increase its annual sales to €2 billion by 2027. Although, the merger is closely monitored by the British and French governments as it aims to combine OneWeb’s low earth orbit constellation with Eutelsat’s satellite fleet to offer quick internet services by satellite (proactiveinvestors.com).

Nevertheless, the French group estimates annual sales of the merger to amount to €1.2 billion in 2023 once the deal is finalised. Core operating profit is expected to increase at an even quicker pace than revenue (investing.com).

The satellite company values its British partner at approximately $3.4 billion (£3.05 billion) and as a result of the deal it would own 100% of the company. The aim for this merger is to tap into growth of real-time video games and the increasing demand for quick internet connections from many companies (proactiveinvestors.com). Many firms are increasingly relying on cloud computing services in day-to-day operations and Eutelsat see this as an opportunity in the market. 

Additionally, Eutelsat extended its no-dividend policy to three years from two in order to channel cash flow to investments. However, JPMorgan stated that they find it difficult to understand why the company is funding such a high-risk acquisition like OneWeb using ‘cheap’ equity (investing.com).

The primary rivals currently challenging for a piece of the satellite internet market are Amazon’s project ‘Kuiper’ and Musk’s owned SpaceX ‘Starlink’ (investing.com).