OneWeb, the U.S company backed by Japan’s SoftBank Group, announced that is merging with satellite operator Intelsat. In a joint statement, the companies said that SoftBank will invest $1.7 billion and retain 39.9% voting stake in the combined company.
This deal is intended to reduce Intelsat’s debt by approximately $3.6 billion. “We believe that combining Intelsat with OneWeb will create an industry leader unique in its ability to provide affordable broadband anywhere in the world”, said Stephen Spengler, Chief Executive Officer of Intelsat. The transaction is expected to close late in the third quarter of 2017.
The combination of the companies, if consummated, will enable Intelsat to improve its structure and financial flexibility, the acceleration of each company’s strategic plans, the development of new market applications and the provision of advanced services for new and existing customers.
In December 2016, the Japanese telecom giant had announced it was investing USD 1 billion in OneWeb to support the technological development and the construction of a high volume satellite production facility.