Eutelsat Communications (OTC:EUTLF) SA (Euronext Paris: ETL), a leading satellite operator, announced on Thursday the successful completion of its all-share merger with OneWeb, a global low Earth orbit (LEO) satellite communications network. The merger was approved at the Ordinary and Extraordinary General Meeting of Eutelsat shareholders held on the same day. This strategic combination gives birth to the Eutelsat Group, which is poised to be a global leader in space communications.
Despite Eutelsat retaining its headquarters in Paris, OneWeb will operate as a subsidiary under the commercial name Eutelsat OneWeb, with its operational center remaining in London. While the company continues to be listed on the Euronext Paris Stock Exchange, it has also applied for a standard listing on the London Stock Exchange.
The merger allows the newly formed Eutelsat Group to leverage Eutelsat's powerful geostationary orbit (GEO) fleet and OneWeb's LEO constellation, offering customers fully integrated connectivity services. With OneWeb's network already active and set to be globally operational by the end of 2023, this combined GEO-LEO service is expected to unlock new markets and applications for customers. Broadcast and video services will remain integral to Eutelsat Group's business.
According to Dominique D'Hinnin, Chairman of the Board of Directors, this merger marks an historic moment for the satellite industry. "We are bringing together two businesses that are at the forefront of delivering integrated, seamless and reliable connectivity to customers worldwide," he said.
The projected financial performance of the combined entity is promising. It is expected to grow at a double-digit revenue compound annual growth rate (CAGR) over the medium to long-term, reaching approximately €2bn ($2.33bn) in 2027. Adjusted EBITDA for the combined entity is also expected to grow at a double-digit CAGR over the same period, outpacing revenue growth.
The news of the merger was well received in the market, with shares of Eutelsat rising 2% in Paris on Thursday. However, it's worth noting that they have fallen by around half since the merger was announced in July last year. The secondary listing of Eutelsat in London, as part of the OneWeb deal, is likely to be seen as a positive development for the city's stock market.
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