According to industry reports seen by BMA, satellite operators SES and Intelsat are actively discussing a potential merger. This follows an announcement by Eutelsat (satellite operators) two weeks ago that it planned to acquire LEO constellation player OneWeb in a deal that values US$4.38 billion.
According to reports, the two companies are in active discussions about the structure of a potential deal.
SES and Intelsat are traditional geostationary Earth orbit satellite providers with legacy video businesses. However, the two companies have decided to invest in medium Earth orbit (MEO) constellations to deliver an expected upsurge in demand for satellite-enabled data communications rather than go down the more capital-intensive LEO route.
According to reports, the merger between the companies would create a group with annual revenues of around US$4 billion. Furthermore, SES has a market capitalisation of US$3.63 billion and is carrying US$3.67 billion in net debt, while Intelsat emerged from bankruptcy earlier this year with a deficit of US$7 billion.
Following its emergence from Chapter 11 bankruptcy, Intelsat now has the Munich-based financial service company Allianz as a major investor.
SES recently acquired DRS GES, a provider of government solutions that, according to SES, will play well with its MEO capabilities.