France's Eutelsat in merger talks with UK's OneWeb

France’s Eutelsat Communications confirmed on Monday that it has engaged in merger talks with UK rival OneWeb.

"Following recent market rumours, Eutelsat Communications confirms that it has engaged in discussions with its co-shareholders in OneWeb regarding a potential all-share combination to create a global leader in Connectivity with complementary GEO/LEO activities," it said.

It said the combined entity would be the first multi-orbit satellite operator offering integrated GEO (Geostationary Orbit) and LEO (Low Earth Orbit) solutions and would be uniquely positioned to address a booming satellite connectivity market of around $16bn.

"OneWeb is one of the two only global LEO networks and has experienced strong momentum over recent months, with service expected to be fully deployed in 2023," it said.

"The transaction would represent a logical next step in the successful partnership between Eutelsat and OneWeb, started with Eutelsat’s equity investment in OneWeb in April 2021 and deepened with the Global Distribution Agreement announced in March 2022."

Eutelsat currently has a 23% stake in OneWeb, alongside a consortium of public and private investors.

Under the terms of the deal being discussed, Eutelsat and OneWeb shareholders would each hold 50% of the combined group’s shares.

"There can be no assurance that these discussions will result in any agreement," Eutelsat said, adding that it will update the market as soon as soon as there are any new developments.

At 1020 BST, Eutelsat shares were down 17.8% at €8.57.