Intelsat and OneWeb have entered into a “definitive combination agreement” with a view to creating an entity with a unique ability to provide affordable broadband anywhere in the world. Intelsat and SoftBank — a Japanese conglomerate which in December pledged to invest $1bn in OneWeb — also entered into a definitive share purchase agreement under which SoftBank will invest $1.7bn in newly issued common and preferred shares of the combined company.
Both the merger and the SoftBank investment are subject to successful completion of debt exchange offers to certain existing Intelsat bondholders as well as receipt of certain regulatory approvals.
The complementary strengths of Intelsat and OneWeb, combined with the investment by SoftBank, are intended to create a financially stronger company with the flexibility to aggressively pursue new growth opportunities resulting from the explosion in demand for broadband connectivity for people and devices everywhere.
Stephen Spengler, CEO of Intelsat, said, “By merging OneWeb’s LEO satellite constellation and innovative technology with our global scale, terrestrial infrastructure and GEO satellite network, we will create advanced solutions that address the need for ubiquitous broadband.”
In December 2016, SoftBank announced its commitment to invest $1bn in OneWeb to support the technological development and the construction of a high-volume satellite production facility. Intelsat was a founding investor in OneWeb, making a minority equity investment in 2015.
Under the terms of the transactions, SoftBank will acquire a number of common shares of the combined company, resulting in an approximate 39.9% voting stake, and an additional number of non-voting preferred shares for an aggregate cash consideration of approximately $1.7bn.
Intelsat’s CEO, Stephen Spengler, will be the CEO of the combined company. OneWeb’s Founder and Executive Chairman, Greg Wyler, will be the Executive Chairman of the combined company’s Board of Directors.
The transaction is expected to close late in the third quarter of 2017.