Eutelsat Shares Tumble After OneWeb Merger Talks Unveiled
Investing.com
Published Jul 25, 2022 08:12AM ET
By Scott Kanowsky
Investing.com -- Shares in Eutelsat Communications SA (EPA:ETL) tumbled toward the bottom of the pan-European STOXX 600 on Monday after the satellite operator confirmed that it is in talks for an all-share merger with rival OneWeb.
In a statement, Eutelsat said the transaction is the "logical next step" forward in its effort to boost its presence in the lucrative satellite connectivity market, where it will face competition from similar ventures backed by billionaire entrepreneurs like Jeff Bezos and Elon Musk.
The deal would see shareholders from each company own 50% of the combined group, with OneWeb stakeholders swapping their interest in the U.K. firm in exchange for newly issued Eutelsat shares. Eutelsat already holds 23% of shares in OneWeb, the space internet company that was saved from bankruptcy in 2020 thanks in part to a significant investment from the British government.
According to media reports, the combined entity would value the U.K.'s stake at $600 million, and pair it alongside investments from the French and Chinese governments. Paris and Beijing already own a 20% and 5% stake in Eutelsat, respectively.
Eutelsat did not confirm these reports in its statement.
However, Eutelsat warned that "there can be no assurance" that the negotiations will result in a final agreement. Any combination would need shareholder and regulatory approval, the company added.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.