France's Eutelsat to merge with UK rival OneWeb

The deal, which values OneWeb at $3.4bn, would be structured as an exchange of OneWeb shares by its shareholders with new shares issued by Eutelsat.

Eutelsat chairman Dominique D’Hinnin said: "I am delighted to announce this new and significant step in the collaboration between Eutelsat and OneWeb. Bringing together our two businesses will deliver a global first, combining LEO (Low Earth Orbit) constellations and GEO (Geostationary Orbit) assets to seize the significant growth opportunity in connectivity, and deliver to our customers solutions to their needs across an even wider range of applications.

"This combination will accelerate the commercialisation of OneWeb’s fleet, while enhancing the attractiveness of Eutelsat’s growth profile. In addition, the combination carries significant value creation potential, anchored on a balanced mix of revenue, cost and capex synergies."

The UK government, which is a minority shareholder in OneWeb, said the merger is positive news for UK taxpayers.

"Having made a $500m investment in OneWeb two years ago, the UK Government will now have a significant stake in what will become a single, powerful, global space company, working on the sound financial footing needed to make the most of the technological advantages it has to compete in the highly-competitive global satellite industry, against companies around the world," it said.